Question

The United States has a comparative advantage in the production of wheat, and Haiti has a comparative advantage in the production of sugar. If both countries specialize based on the theory of comparative advantage

Answer 1

the production and the consumption of both the goods will increase.

Step-by-step explanation:

• The U.S and the Haiti have a comparative advantage in the production of the wheat and sugar thus they can maximize their combined output and allocate their resources more efficiently.

• If both of the countries tend to specials on the basis of the theory of comparative cost advantage given by David Ricardo.