The Production Possibilities Table Given Below Shows How Many Bushels

question 22

Multiple Choice

The production possibilities table given below shows how many bushels of either wheat or rice can be produced in India and Canada with 1 unit of input.To achieve gains from specialization:

• A) India should export rice to Canada and import Canadian wheat.
• B) India should export wheat to Canada and import Canadian rice.
• C) Canada should produce both wheat and rice and not trade with India.
• D) India should produce both wheat and rice and not trade with Canada. India has a comparative advantage in producing rice (an opportunity cost of 1 vs.2)while Canada has a comparative advantage in producing wheat (an opportunity cost of ½ vs.1).Therefore,India should export rice and Canada should export wheat.

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