Use the following information to answer the next two questions. Suppose that 500 hours of labor in the US could produce either 700 units of product X...

Use the following information to answer the next two questions.

Suppose that 500 hours of labor in the US could produce either 700 units of product X or 800 units of product Y. 500 hours of labor in Canada could produce either 900 units of X or 1000 units of Y. 

Both countries would be better off if the US specialized in producing product X and Canada specialized in producing product Y.

True

False

International trade between the US and Canada for goods X and Y would occur if the market value for each good is Y=.89X

 True

False