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-(Table: Wheat and Aluminum)Use Table: Wheat and Aluminum.The United States and Germany can produce both wheat and aluminum.The table shows,in tonnage,the maximum annual output combinations of wheat and aluminum that can be produced.Which choice represents a possible trade based on specialization and comparative advantage?
A)Germany would trade 2 tons of wheat to the United States for 1 ton of aluminum.
B)Germany would trade 2 tons of aluminum to the United States for 0.5 ton of wheat.
C)The United States would trade 1 ton of wheat to Germany for 1 ton of aluminum.
D)The United States would trade 1 ton of wheat to Germany for 1.5 tons of aluminum.

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Use the following to answer question:

-(Table: Wheat and Aluminum)Use Table: Wheat and Aluminum.The United States and Germany can produce both wheat and aluminum.The table shows,in tonnage,the maximum annual output combinations of wheat and aluminum that can be produced.Which choice represents a possible trade based on specialization and comparative advantage?
A)Germany would trade 2 tons of wheat to the United States for 1 ton of aluminum. 
B)Germany would trade 2 tons of aluminum to the United States for 0.5 ton of wheat. 
C)The United States would trade 1 ton of wheat to Germany for 1 ton of aluminum. 
D)The United States would trade 1 ton of wheat to Germany for 1.5 tons of aluminum.

Quizplus · Accepted Answer

The United States should specialize in wheat if it has a comparative advantage in wheat production, and Germany should specialize in aluminum if it has a comparative advantage in aluminum production. The trade should reflect these specializations, with the U.S. trading wheat for more aluminum than it could produce itself, making option D a possible trade.

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