Costa Rica Allows Trade with the Rest of the World

question 5

Multiple Choice

Costa Rica allows trade with the rest of the world.We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we

• A)know whether Costa Rica imports or exports pharmaceuticals.
• B)compare the world price of pharmaceuticals to the price of pharmaceuticals that would prevail in Costa Rica if trade with the rest of the world were not allowed.
• C)compare the quantity of pharmaceuticals consumed in Costa Rica with the quantity of pharmaceuticals that would be consumed in Costa Rica if trade with the rest of the world were not allowed.
• D)All of the above are correct.

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Definitions:

Bed and Breakfast

A lodging establishment that offers overnight accommodation and breakfast, typically in a private home or small hotel.