The reason that most of the coffee that is consumed in the United States comes from Colombia is that
A) Colombia has an absolute advantage in producing coffee relative to the United States.
B) Colombia has a comparative advantage in producing coffee relative to the United States.
C) coffee cannot be grown in the United States.
D) government trade disincentives regarding Colombian coffee make such trade possible.

Question

Quizplus · Accepted Answer

Colombia has a comparative advantage in producing coffee relative to the United States. This means that Colombia can produce coffee at a lower opportunity cost than the United States, which makes it more efficient for them to specialize in producing coffee and for the United States to import it. It is also possible for coffee to be grown in the United States, but it may not be as efficient or cost-effective as it is for Colombia due to factors such as climate and labor costs. There are no known government trade disincentives regarding Colombian coffee.

The Reason That Most of the Coffee That Is Consumed