Suppose Puerto Rico has a comparative advantage over other countries in producing sugar,but other countries have an absolute advantage over Puerto Rico in producing sugar.If trade in sugar is allowed,Puerto Rico
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

Puerto Rico will export sugar because it has a comparative advantage, meaning it can produce sugar at a lower opportunity cost than other countries, even if those countries have an absolute advantage.

Suppose Puerto Rico Has a Comparative Advantage Over Other Countries