Suppose that Argentina and Chile are both engaged in the production of copper and wheat, and that Argentina has an absolute advantage in the production of both goods. If Chile has a lower opportunity cost for producing copper, then:
A) Chile has a comparative advantage in wheat production, but there will be no gains from specialisation and trade
B) Chile has a comparative advantage in the production of copper, but it is outweighed by Argentina's absolute advantage in wheat production
C) Argentina still has a comparative advantage in the production of both goods
D) Chile has a comparative advantage in the production of copper, and specialisation and trade between the two countries can be mutually beneficial
Correct Answer:
Verified
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