Suppose that Burkina Faso, a nation in Africa, can produce cotton and medicinal plants and that the opportunity cost of producing one bale of cotton is two medicinal plants. Suppose that a neighboring nation, Togo, can produce those goods as well and that the opportunity cost of one bale of cotton is two medicinal plants. How would trade affect each country?
a. Burkina Faso will specialize in cotton while Togo will specialize in medicinal plants.
b. Burkina Faso will specialize in medicinal plants while Togo will specialize in cotton.
c. Two thirds of Burkina Faso's production will be in cotton while one third of Togo's production will be in medicinal plants
d. Two thirds of Togo's production will be in cotton while one third of Burkina Faso's production will be in medicinal plants
e. Nothing will change.
E
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Indicate whether the statement is true or false