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Question

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Assuming constant costs in the neighborhood of their current levels of production, the exhibit shows the number of units of commodity X each country would have to forgo to produce the additional units of commodity Y indicated. Further assume that the only input is labor and that it remains fully employed. If there were unrestricted trade and specialization according to the law of comparative advantage:
Answer
a. the United States would export Y and Canada would export X.
b. the United States would export X and Canada would export Y.
c. the United States would export both X and Y.
d. the United States and Canada would each be self-sufficient in both X and Y.

Please help & explain.

Explanation / Answer

b. the United States would export X and Canada would export Y.

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