The diagram below shows the domestic demand and supply curves in the market for newsprint in Paperland.
FIGURE 33- 5
-Suppose Canada could produce all goods and services more cheaply than all other countries.In that case,
A) no trade would occur because Canada would not have a comparative advantage in producing anything.
B) trade would probably take place because Canada would still have a comparative disadvantage in producing some goods.
C) trade would occur but only if other countries subsidize the import of Canadian goods and services.
D) trade would occur but only if other countries also have an absolute advantage.
E) no trade would occur because Canada would have an absolute advantage in producing everything.
Correct Answer:
Verified
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