If wages are higher in the United States than in Brazil, then:
A) trade is still beneficial to the United States and Brazil.
B) Brazil will not have a comparative advantage in the production of any good.
C) the United States cannot have a comparative advantage in the production of any good.
D) trade with Brazil will clearly lower wages in the United States.

Question

Quizplus · Accepted Answer

Even if wages are higher in the United States than in Brazil, trade can still be beneficial to both countries. The United States can specialize in producing goods where it has a comparative advantage, while Brazil can specialize in producing goods where it has a comparative advantage. This will still result in gains from trade for both countries.

If Wages Are Higher in the United States Than in Brazil