5. The price of trade Suppose that Croatia and Norway both produce sunflowers and wheat. Croatia's opportunity cost of producing a bushel of wheat is 6 bushels of sunflowers while Norway's opportunity cost of producing a bushel of wheat is 11 bushels of sunflowers. By comparing the opportunity cost of producing wheat in the two countries, you can tell that production of wheat and has a comparative advantage in the production of sunflowers. has a comparative advantage in the Suppose that Croatia and Norway consider trading wheat and sunflowers with each other. Croatia can gain from specialization and trade as long as it receives more than of sunflowers for each bushel of wheat it exports to Norway. Similarly, Norway can gain from trade as long as it of wheat for each bushel of sunflowers it exports to Croatia. receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of sunflowers) would allow both Norway and Croatia to gain from trade? Check all that apply. 8 bushels of sunflowers per bushel of wheat 1 bushel of sunflowers per bushel of wheat 7 bushels of sunflowers per bushel of wheat 3 bushels of sunflowers per bushel of wheat

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