If the world price of coffee is lower than Colombia's domestic price of coffee without trade,then Colombia
A)should import coffee.
B)has a comparative advantage in coffee.
C)should produce just enough coffee to satisfy domestic demand.
D)should produce no coffee domestically.

Question

Quizplus · Accepted Answer

If the world price of coffee is lower than Colombia's domestic price of coffee without trade, it means that Colombia can buy coffee from other countries at a lower price than producing it domestically. Therefore, it is economically efficient for Colombia to import coffee rather than produce it domestically.

If the World Price of Coffee Is Lower Than Colombia's