Comparative Advantage via Opportunity Costs Steps: - Calculate opportunity cost of steel for X: 6M wheat / 2M steel = 3M wheat per 1M steel; for Y: 4M wheat / 1M steel = 4M wheat per 1M steel. - X has lower cost for steel (3M vs. 4M wheat), so comparative advantage in steel. - Calculate opportunity cost of wheat for X: 2M steel / 6M wheat ≈ 0.33M steel per 1M wheat; for Y: 1M steel / 4M wheat = 0.25M steel per 1M wheat. - Y has lower cost for wheat (0.25M vs. 0.33M steel), so Y specializes in wheat; X in steel for mutual gains from trade. Why A is correct: - Comparative advantage theory states countries gain by specializing in goods with lower domestic opportunity costs and trading, so X specializes in steel. Why the others are wrong: - B: Both countries gain from trade by specializing per comparative advantage. - C: Y has comparative advantage in wheat due to lower opportunity cost. - D: Y gains from trade by specializing in wheat and importing steel. …