If the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

A. The USA specializes in potatoes because of its comparative advantage in producing potatoes.

B. The USA specializes in wheat because of its absolute advantage in producing wheat.

C. The USA specializes in wheat because of its comparative advantage in producing wheat.

D. There can be no mutual gains from trade.

Question

Jazlene Villarreal

Business

24 December, 02:53

If the USA could produce 1 ton of potatoes or 0.5 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, there can be mutual gains from trade if:

A. The USA specializes in potatoes because of its comparative advantage in producing potatoes.

B. The USA specializes in wheat because of its absolute advantage in producing wheat.

C. The USA specializes in wheat because of its comparative advantage in producing wheat.

D. There can be no mutual gains from trade.

+2

Answers (1)

Know the Answer?

Stinky · Answer 1

A. The USA specializes in potatoes because of its comparative advantage in producing potatoes.

Explanation:

US 1 ton of potatoes or 0.5 tons of wheat = 2

Ireland 3 tons of potatoes or 2 tons of wheat = 1,5