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Business, 18.02.2020 20:57 cvbnkifdfg

Suppose that Spain and Denmark both produce rye and wine. Spain's opportunity cost of producing a bottle of wine is 5 bushels of rye while Denmark's opportunity cost of producing a bottle of wine is 10 bushels of rye. By comparing the opportunity cost of producing wine in the two countries, you can tell thathas a comparative advantage in the production of wine and___ has a comparative advantage in the production of rye. Suppose that Spain and Denmark consider trading wine and rye with each other. Spain can gain from specialization and trade as long as it receives more than of rye for each bottle of wine it exports to Denmark. Similarly, Denmark can gain from trade as long as it receives more than of wine for each bushel of rye it exports to Spain. Based on your answer to the last question, which of the following terms of trade (that is, price of wine in terms of rye) would allow both Denmark and Spain to gain from trade? Check all that apply. a. bushel of rye per bottle of wineb. 8 bushels of rye per bottle of winec. 9 bushels of rye per bottle of wined. 3 bushels of rye per bottle of wine

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