Question

In the example given in the Topic Seven PowerPoint, would England and Portugal agree to trade 1 bushel of corn for 1 jug of wine? А Yes B No, Portugal would object C No England would object We cannot tell from the information given

Answer 1

Based on comparative advantage, England would likely object to trading 1 bushel of corn for 1 jug of wine because their resources are more efficiently used in producing cloth.

Step-by-step explanation:

The question posed asks whether England and Portugal would agree to trade 1 bushel of corn for 1 jug of wine based on the given example of comparative advantage. According to the classic example of comparative advantage, Portugal has a comparative advantage in making wine, and England in producing cloth. Therefore, based on the principle of comparative advantage, England would likely object to trading corn for wine, given that their resources could be more efficiently used in producing cloth rather than wine.