By comparing the world price of horseradish to Cropland's domestic price of horseradish,we can determine whether Cropland
A) will export horseradish (assuming trade is allowed).
B) will import horseradish (assuming trade is allowed).
C) has a comparative advantage in producing horseradish.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

If the world price of horseradish is lower than Cropland's domestic price, Cropland will import horseradish. If the world price of horseradish is higher than Cropland's domestic price, Cropland will export horseradish. In either case, Cropland has a comparative advantage in producing horseradish.

By Comparing the World Price of Horseradish to Cropland's Domestic