Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,500 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to trade to acquire more cloth. If the international price of cloth is 1.5 bushels of wheat per yard, how many bushels of wheat will Home export to Foreign?
A) 1,050 bushels
B) 800 bushels
C) 700 bushels
D) 550 bushels

Question

Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,500 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to trade to acquire more cloth.  If the international price of cloth is 1.5 bushels of wheat per yard, how many bushels of wheat will Home export to Foreign?
A) 1,050 bushels 
B) 800 bushels 
C) 700 bushels 
D) 550 bushels

Quizplus · Accepted Answer

The Answer of Home has a comparative advantage in wheat, and Foreign has a comparative advantage in cloth. Once trade occurs, Home produces 1,500 bushels of wheat, and Foreign produces 1,000 yards of cloth. The following table shows the amount of wheat that Home is willing to trade to acquire more cloth.  If the international price of cloth is 1.5 bushels of wheat per yard, how many bushels of wheat will Home export to Foreign?
A) 1,050 bushels 
B) 800 bushels 
C) 700 bushels 
D) 550 bushels

Home Has a Comparative Advantage in Wheat, and Foreign Has