Suppose the United States must give up the production of one gallon of paint to produce one pair of shoes. Mexico must give up two gallons of paint to produce one pair of shoes. According to the principle of comparative advantage:
A) there are no benefits to specialization and trade.
B) Mexico should specialize in producing paint, the United States should specialize in producing shoes.
C) Mexico should specialize in producing shoes, the United States should specialize in producing paint.
D) the United States should produce both goods because it has an absolute advantage in both products.
Correct Answer:
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