Answer:
B. its opportunity cost of producing wheat is below the world price.
Explanation:
This condition suggests that the nation could grow more wheat per unit of input it can use compared to other products it could produce, implying that growing wheat is the worthy use of the nation’s resources. The opportunity cost is important to decide whether a country should produce wheat or buy it from the international market because if the opportunity cost of production is less than the world price, then it means that wheat can be produced in the country for a cheaper price compared to the world market price. This relative strength enables the country to export the wheat at a lower price, thus making benefits from trading.
Therefore, the correct option is B.
Answer:
B. its opportunity cost of producing wheat is below the world price
Explanation:
A. Its domestic price of wheat exceeds the world price The nation would import wheat rather than export it if the domestic price was greater than the worldwide cost since it would be less expensive to do so.
B. It's opportunity cost of producing wheat is below the world price: The nation can produce wheat more effectively than other nations if the opportunity cost of doing so is less than the price of wheat globally. In order to profit from greater prices abroad, it would export wheat.
C. Other countries have a shortage of wheat: While demand for wheat may arise due to shortages in other nations, a country's comparative advantage and opportunity costs—rather than shortages abroad—are the main drivers of exports.
D. it produces a surplus of wheat: A nation's decision to export wheat is not based just on its ability to create a surplus. Comparative advantage and opportunity costs in relation to global pricing determine whether or not to export.
Therefore, the correct answer is B.