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If Ecuador Has an Absolute Advantage in Coffee and Argentina

Question 71

Multiple Choice

If Ecuador has an absolute advantage in coffee and Argentina in wheat,then,according to trade theory:


A) Ecuador should focus production on coffee and trade for other goods.
B) Ecuador would do well to produce its own coffee rather than import it from Bolivia.
C) Argentina should focus on producing wheat and trade for coffee.
D) Ecuador should focus on production of coffee and trade for other goods,it should not import coffee and should increase trading its coffee and also produce other goods.
E) Argentina should start accumulating coffee from trading with Ecuador to gain an absolute advantage. Ecuador should focus on production of coffee and trade for other goods,it should not import coffee and should increase trading its coffee and also produce other goods.

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