Country A is extremely efficient in the mining of tin.However,its climate and terrain makes it difficult to produce corn.According to the theory of comparative advantage,Country A should:
A)produce both tin and corn in order to remain self-sufficient.
B)watch the global market to see which product is bringing the highest price.
C)import the resources needed to produce corn.
D)concentrate its production on tin and buy corn from an efficient producer.

Question

Quizplus · Accepted Answer

According to the theory of comparative advantage, a country should specialize in producing and exporting goods that it can produce more efficiently and import goods that it cannot produce efficiently. Since Country A is inefficient in producing corn due to its climate and terrain, it should specialize in producing tin which it can produce efficiently. It should then buy corn from a country that is efficient in producing it. Therefore, the best choice would be to concentrate its production on tin and buy corn from an efficient producer, which is option D.

Country a Is Extremely Efficient in the Mining of Tin