An American worker and German worker can each produce one car per month. An American worker can produce two tons of grain per month, and a German worker can produce one ton of grain per month.
Reference the scenario above to answer these questions:
Calculate what the optimal trade would be for these two countries.
Which country has the comparative advantage for producing cars? Why?
Which country has the comparative advantage for producing grain? Why?
In your opinion, if the United States exports grain and imports cars, who is potentially hurt by this international trade? Who can benefit from this trade? Think about what happens to farmers and autoworkers in the United States due to this kind of international trade.
Determine how much each should produce to optimize production.