Multiple Choice
Poland requires 4 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. The Czech Republic requires 6 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. Suppose that the international price of coal is 4 1/4 bushels of wheat per ton of coal. Which country is likely to have the larger gain from trade?
A) Poland
B) the Czech Republic
C) Neither country has the larger gain.
D) Both countries have the larger gain.
Correct Answer:
Verified
Correct Answer:
Verified
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