According to the following table,if the US trades 9 bushels of wheat to the UK for 9 yards of cloth,the US gains from trade will equal: $\begin{array}{|l|c|c|}
\hline &\text { U.S. }&\text { U.K.} \
\hline \text {Wheat (bushels/hr) }& 9 & 3 \
\hline\text { Cloth (yards/hr) }& 5 & 4 \
\hline
\end{array}$
A)4 bushels of wheat
B)3 yards of cloth
C)4 yards of cloth
D)5 bushels of wheat

Question

Quizplus · Accepted Answer

The US has a comparative advantage in wheat production, while the UK has a comparative advantage in cloth production. Therefore, by trading with each other, both countries can benefit and increase their overall welfare. The opportunity cost for the US to produce 9 yards of cloth is 9 bushels of wheat, while the opportunity cost for the UK to produce 9 bushels of wheat is 9/3 = 3 yards of cloth. Since the US can only produce 9 bushels of wheat and the UK can only produce 9 yards of cloth, they should trade 9 bushels of wheat for 3 yards of cloth, which is a better deal for the US as they have a higher opportunity cost in cloth production. Therefore, the US gains 1 yard of cloth from trade, which is a gain from trade of 1 yard of cloth.

According to the Following Table,if the US Trades 9 Bushels