Multiple Choice
Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 20 bushels of corn or 5 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. Which of the following statements is correct?
A) Both countries could gain from trade with each other.
B) Neither country would gain from trade because Cornland has an absolute advantage in both goods.
C) Neither country would gain from trade because neither one has a comparative advantage.
D) Only Oatland could possibly gain from trade.
Correct Answer:

Verified
Correct Answer:
Verified
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