If the world price of sugar is lower than Brazil's domestic price of sugar without trade,then Brazil
A) should import sugar.
B) has a comparative advantage in sugar.
C) should produce just enough sugar to satisfy domestic demand.
D) should produce no sugar domestically.

Question

Quizplus · Accepted Answer

If the world price of sugar is lower than Brazil's domestic price of sugar without trade, it means that other countries are able to produce sugar at a lower cost than Brazil. Therefore, Brazil should import sugar to take advantage of the lower world price and satisfy domestic demand at a lower cost.

If the World Price of Sugar Is Lower Than Brazil's