Suppose Guatemala has an absolute advantage over other countries in producing sugar,but other countries have a comparative advantage over Guatemala in producing sugar.If trade in sugar is allowed,Guatemala
A) will import sugar.
B) will export sugar.
C) will either export sugar or export sugar, but it is not clear from the given information.
D) would have nothing to gain either from exporting or importing sugar.

Question

Quizplus · Accepted Answer

Even though Guatemala may have an absolute advantage in producing sugar, if other countries have a comparative advantage in producing sugar, it may not be the most efficient use of resources for Guatemala to produce sugar. Therefore, it is likely that Guatemala would import sugar from other countries where it is produced more efficiently, rather than producing it domestically.

Suppose Guatemala Has an Absolute Advantage Over Other Countries in Producing