If two countries find that neither has a comparative advantage in the production of any good or service:
A) it must be true that one country produces everything more efficiently than the other country.
B) each country will find it beneficial to trade.
C) it is impossible for them to benefit from trade.
D) they should still specialize and trade.
Ans: C) it is impossible for them to benefit from trade.
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Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Heckscher-Ohlin Theorem, Chile should export goods that
A) intensively use labor input. B) intensively use capital input. C) intensively use natural resources. D) use capital and labor in about equal proportions.