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Suppose Panama Produces Only Two Goods, Bananas and Hats

Question 58

Multiple Choice

Suppose Panama produces only two goods, bananas and hats. If Panama has a comparative advantage in bananas, a move toward free trade will


A) harm hat workers, benefit banana workers, but benefit the nation as a whole.
B) harm hat workers, harm banana workers, but benefit the nation as a whole.
C) benefit hat workers, harm banana workers, but harm the nation as a whole.
D) benefit hat workers, harm banana workers, but benefit the nation as a whole.

Correct Answer:

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