Assume,for Mexico,that the domestic price of oranges without international trade is lower than the world price of oranges.This suggests that,in the production of oranges,
A)Mexico has a comparative advantage over other countries and Mexico will export oranges.
B)Mexico has a comparative advantage over other countries and Mexico will import oranges.
C)other countries have a comparative advantage over Mexico and Mexico will export oranges.
D)other countries have a comparative advantage over Mexico and Mexico will import oranges.

Question

Quizplus · Accepted Answer

When the domestic price is lower than the world price, it indicates that Mexico can produce oranges more efficiently than other countries, giving it a comparative advantage. Therefore, Mexico will export oranges.

Assume,for Mexico,that the Domestic Price of Oranges Without International Trade