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10) Suppose that Japan and Canada can both produce televisions and soybeans, with a linear PPF. In one year, Japan can produce 5 million televisions
10) Suppose that Japan and Canada can both produce televisions and soybeans, with a linear PPF. In one year, Japan can produce 5 million televisions or 1 million bushels of soybeans while Canada can produce 2 million televisions or 4 million bushels of soybeans. Which of the following is most likely to be true? A. Both countries can gain from trade if Japan specializes in televisions and sells some to Canada for 2.5 bushels of soybeans each. B. Both countries can gain from trade if Canada specializes in soybeans and buys televisions from Japan at a price of 2 bushels of soybeans each. C. Both countries can gain from trade if the price of soybeans is 2 televisions per bushel. D. Canada should not be willing to pay more than 0.2 bushels of soybeans for each television. E. Neither country can gain from trade
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