If Argentina Has an Absolute Advantage in the Production of Beef

question 286

Multiple Choice

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 specialization and trade will benefit both countries.
• B) it is reasonable to expect that specialization will benefit both countries, but trade will not.
• C) neither country has anything to gain from specialization and trade.
• D) it is reasonable to expect that trade will benefit both countries, but specialization will not.