If Russia Has a Comparative Advantage in the Production of Wheat

question 275

Multiple Choice

If Russia has a comparative advantage in the production of wheat and China has a comparative advantage in the production of textiles, then

• A) neither country has anything to gain from specialization and trade.
• B) it is reasonable to expect that specialization will benefit both countries, but trade will not.
• C) it is reasonable to expect that specialization and trade will benefit both countries.
• D) it is reasonable to expect that trade will benefit both countries, but specialization will not.

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