SCENARIO: HOME'S WILLINGNESS TO TRADE WHEAT FOR CLOTH

question 133

Multiple Choice

SCENARIO: HOME'S WILLINGNESS TO TRADE WHEAT FOR CLOTH
Home has a comparative advantage in wheat, and Foreign has a
Comparative advantage in cloth.Once trade occurs, Home produces
1,500 bushels of wheat, and Foreign produces 1,000 yards of cloth.The
Following table shows the amount of wheat that Home is willing to trade
To acquire more cloth.

Reference: Ref 2­13
(Scenario: Home's Willingness to Trade Wheat for Cloth) If the
International price of cloth is 1.5 bushels of wheat per yard, how many
Bushels of wheat will Home export to Foreign?

• A)1,150 bushels
• B)1,100 bushels
• C)850 bushels
• D)650 bushels

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