Final answer:
A trade between Canada and Saudi Arabia involving a shipment of wheat for oil is called a barter, an arrangement where goods are directly exchanged without using money. This is based on the concept of opportunity cost and the principle of comparative advantage, allowing both parties to benefit and consume more than they would without trade.
Step-by-step explanation:
Barter is an exchange where goods or services are traded directly for other goods or services without the use of money as a medium of exchange. It is one of the oldest forms of trade and is based on the principle of mutual benefit, where each party expects to gain from the exchange. The concept of opportunity cost plays a crucial role in trading decisions. In the case of Saudi Arabia, if the country can acquire more bushels of corn for fewer barrels of oil than it costs to produce domestically, it benefits from the trade. Similarly, if a country like Canada can obtain oil in exchange for wheat at a rate more favorable than its domestic cost of production or acquisition, it too will have gained from the trade. Gains from trade are not limited to barter systems but are a fundamental aspect of international trade. By specializing in the production of goods for which they have a comparative advantage and trading with other nations, countries can consume more than they would in isolation.