The table indicates the amounts of rice and wheat that two countries, X and Y, are able to produce when each one allocates its resources equally to rice and wheat production. Suppose each country then specialises according to comparative advantage and trades with the other. Which terms of trade would be beneficial for both countries?
- A1 wheat = 5 rice
- B1 wheat = 3 rice
- C1 wheat = 2.5 rice
- D1 wheat = 2 rice