If Argentina has an absolute advantage in the production of beef and Guatemala has an absolute advantage in the production of bananas, then
A. it is reasonable to expect that trade will benefit both countries, but specialization will not.
B. neither country has anything to gain from specialization and trade.
C. it is reasonable to expect that specialization and trade will benefit both countries.
D. it is reasonable to expect that specialization will benefit both countries, but trade will not.
Answer: C
You might also like to view...
Refer to Figure 7-2. With the tariff in place, the United States
A) imports 12 million pounds of coffee. B) imports 18 million pounds of coffee. C) exports 38 million pounds of coffee. D) imports 20 million pounds of coffee.
Forecasts by the Congressional Budget Office show spending on Social Security, Medicare,
and Medicaid rising from 10.1 percent of GDP in 2015 to ________ percent of GDP in 2090, and by 2090 the federal government will be spending, as a fraction of GDP, ________ on these three programs as it currently spends on all programs combined. A) 16.2 percent; half as much B) 19.8 percent; half as much C) 19.8 percent; nearly as much D) 16.2 percent; nearly as much