The Countries of Honduras and Belize Engage in Trade of Bananas

The countries of Honduras and Belize engage in trade of bananas and sugar cane. Although Honduras has an absolute advantage in the production of both bananas and sugar cane,it is relatively more efficient in the production of bananas. Therefore,Honduras exports bananas to Belize and imports sugar cane from Belize. This example demonstrates the:

A) Product cycle theory
B) Theory of absolute advantage
C) Theory of factor proportions
D) Leontief Paradox
E) Theory of comparative advantage