Question

The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result:

Answer 1

Answer:

Explanation:

As a result of these statistics there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants. That is because USA is able to produce wheat at a much more efficient pace than China can, but at the same time China can produce pants at a much more efficient pace than the USA. Therefore by trading with one another they can focus on producing what each are most efficient in and trading what they are not, thus saving money.