If the world price of coffee is higher than Colombia's domestic price of coffee without trade,then Colombia
A)should import coffee.
B)has a comparative advantage in coffee and should export 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 higher than Colombia's domestic price of coffee without trade, it indicates that other countries value coffee more than Colombia does. This means that Colombia has a comparative advantage in producing coffee, and exporting it would allow them to earn higher profits. Therefore, the best choice for Colombia is to export coffee.

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