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Question The United States and Germany can

Question : Question The United States and Germany can : 6018

Question

The United States and Germany can produce both wheat and aluminum. The table shows the maximum annual output combinations of wheat and aluminum that can be produced. Which of the following choices would represent a possible trade based upon specialization and comparative advantage?

(a) Germany would trade 2.5 wheat to the U.S. for 1 aluminum. (b) Germany would trade 2 aluminum to the U.S. for .5 wheat. (c) The United States would trade 1.5 wheat to Germany for 1 aluminum. (d) The United States would trade 1 wheat to Germany for 1.5 aluminum. (e) None of the above.

Table: Wheat and Aluminum Wheat Aluminum Production Production U.S. 100 100 Wheat Aluminum Production Production 50 Germany 100

Solution
5 (1 Ratings )

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Finance 9 Months Ago 95 Views
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