Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year
If these two states were to engage in trade, which of the following is TRUE? A) Missouri would specialize in pear production and trade pears to Washington pecans.
B) Missouri would specialize in pecan production and trade pecans to Washington for pears.
C) Washington would produce both pears and pecans and Missouri would produce neither.
D) Half of both Washington's and Missouri's resources would be devoted to pears and the other half to pecans because that is the comparative advantage.
B
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