If Ecuador Has an Absolute Advantage in Coffee and Argentina

question 33

Multiple Choice

If Ecuador has an absolute advantage in coffee and Argentina in wheat, then, according to trade theory:

• A) Ecuador should focus production on coffee and trade for wheat.
• B) Ecuador would do well to produce its own coffee rather than import it from Bolivia.
• C) As stated directly in the text.
• D) all of the above.
• E) two of A, B, and C.

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Definitions:

Infer About Causes

Deduce or conclude information regarding the origins or reasons behind certain events or conditions.

Self-Fulfilling Prophecy

A belief or expectation that influences one's behavior in a way that causes the belief to become true.

Robert Merton

An influential sociologist known for his theories on social structure, anomie, and the self-fulfilling prophecy.

Sigmund Freud

Austrian neurologist known as the founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.