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Canada gives up less to produce lumber than its partner does. Canada should therefore specialise in:
ACoffee crop
BCane sugar
CCrude oil
DCut timber
Answer & Solution
Correct answer: D. Cut timber
1. Its opportunity cost there is lower.
2. The partner takes the other good.
3. Canada specialises in lumber.
_Source: OpenStax Principles of Economics 3e, Chapter 33, International Trade._
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