Assume that U.S. producers can manufacture cookies at a lower opportunity cost than Mexican producers. If this is the case
A) it will not be possible for Mexico to have an comparative advantage in the production of any other products.
B) Mexico could still have the comparative advantage in cookie production.
C) it would still be possible for Mexico to have a comparative advantage in trade for some other products.
D) Mexico would have the comparative advantage in all products compared to the United States.

Question

Quizplus · Accepted Answer

Comparative advantage suggests that even if one country can produce all goods at a lower opportunity cost, trade can still be beneficial if countries specialize in producing goods for which they have the lowest opportunity cost relative to each other. Thus, Mexico could still have a comparative advantage in other products.

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