Canada exports canola oil to Japan. Therefore, O Japan must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade price. O Japan must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade price. O Canada must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade price. O Canada must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade price.

Principles of Macroeconomics (MindTap Course List)
7th Edition
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: Application: International Trade
Section: Chapter Questions
Problem 1QCMC
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Canada exports canola oil to Japan. Therefore,
Japan must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade
price.
O Japan must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade
price.
Canada must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade
price.
Canada must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade
price.
Transcribed Image Text:Canada exports canola oil to Japan. Therefore, Japan must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade price. O Japan must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade price. Canada must have the comparative advantage in the production of canola oil, and its autarkic price is higher than the free trade price. Canada must have the comparative advantage in the production of canola oil, and its autarkic price is lower than the free trade price.
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Country which exports a particular product has comparative advantage in that product and it can set autarkic price above free trade price.

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