Use the Following Scenario to Answer the Questions That Follow

question 134

Multiple Choice

Use the following scenario to answer the questions that follow.
Suppose that Canada, an industrialized nation, and Mexico, a developing nation, both produce clothes and cars. The real wage in Mexico is lower than in Canada. The countries have a free-trade agreement. Each nation will find a comparative advantage.
-Which country's consumers will benefit from the free-trade agreement?

• A) neither
• B) Canada
• C) both
• D) Mexico
• E) not enough information to determine