Consider the data in the following table.

-Referring to the table above, Country A gains most from trade if a computer trades for:
A) 2 bushels of wheat.
B) 3 bushels of wheat.
C) 4 bushels of wheat.
D) 5 bushels of wheat.
E) 6 bushels of wheat.

Question

Consider the data in the following table.
 
-Referring to the table above, Country A gains most from trade if a computer trades for:
A) 2 bushels of wheat. 
B) 3 bushels of wheat. 
C) 4 bushels of wheat. 
D) 5 bushels of wheat. 
E) 6 bushels of wheat.

Quizplus · Accepted Answer

Country A gains most from trade if a computer trades for 2 bushels of wheat because it has a comparative advantage in producing computers and a comparative disadvantage in producing wheat. This means that Country A can produce computers more efficiently than it can produce wheat, and it can get more wheat by trading computers with other countries than it can by producing wheat itself.

Consider the Data in the Following Table