The Country of Zeran Specializes in the Production of Beef

question 31

Multiple Choice

The country of Zeran specializes in the production of beef and produces beef more efficiently than any other country. It buys soybeans, which it produces less efficiently than beef, from Canta, even though it produces soybeans more efficiently than Canta. Which theory of international trade supports Zeran's decision to buy wheat from Canta?

• A) Samuelson critique
• B) mercantilism
• C) Ricardo's theory of comparative advantage
• D) Adam Smith's theory of absolute advantage
• E) Leontief's paradox

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