The president of a small nation is promoting and nurturing coffee agriculture because he believes it is the product at which the country can be the most efficient producer. He is operating under
A) the Theory of Comparative Advantage.
B) the Theory of Economic Dimension.
C) Hofstede's Low versus High Power Distance Dimension.
D) the Principles of Uncertainty Avoidance.

Question

The president of a small nation is promoting and nurturing coffee agriculture because he believes it is the product at which the country can be the most efficient producer. He is operating under
A) the Theory of Comparative Advantage.
B) the Theory of Economic Dimension.
C) Hofstede's Low versus High Power Distance Dimension.
D) the Principles of Uncertainty Avoidance.

Quizplus · Accepted Answer

The president's promotion and nurturing of coffee agriculture as the product at which the country can be the most efficient producer is an example of the Theory of Comparative Advantage. This theory suggests that countries should specialize in producing goods in which they have a comparative advantage, i.e., they can produce more efficiently than other countries, and trade with other countries to increase overall welfare.

The President of a Small Nation Is Promoting and Nurturing