Country A can grow wheat faster and cheaper than Country B. Country B can produce cars better than Country A.
What should each country specialize in?(1 point)
Responses
Country A: Cars, Country B: Wheat
Country A: Cars, Country B: Wheat
Country A: Wheat & Cars, Country B: Cars & Wheat
Country A: Wheat & Cars, Country B: Cars & Wheat
Neither should trade
Neither should trade
Country A: Wheat, Country B: Cars
Country A: Wheat, Country B: Cars
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1 answer
The best option based on the information provided is:
Country A: Wheat, Country B: Cars
This is because Country A has a comparative advantage in growing wheat (it can do so faster and cheaper), while Country B has a comparative advantage in producing cars (it can produce them better than Country A). By specializing in their respective strengths, both countries can benefit from trade.
