Saudi Arabia has a comparative advantage in oil production and China has a comparative advantage in electronics. Which of the following statements about specialization and trade is NOT correct?
A) These two countries should trade because it will free up time in both countries.
B) These two countries should trade because it will free up resources in both countries.
C) These two countries should trade since prices would be higher and each can make higher revenues.
D) The two countries should trade and the workers in each country will become more skilled due to repetition.
Correct Answer:
Verified
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