Suppose New Zealand has a comparative advantage over other countries in producing almonds, but other countries have an absolute advantage over New Zealand in producing almonds. If trade in almonds is allowed, New Zealand
A)will export almonds.
B)will import almonds.
C)will either import almonds or export almonds, but it is not clear from the given information.
D)would have nothing to gain either from exporting or importing almonds.

Question

Quizplus · Accepted Answer

New Zealand having a comparative advantage means it can produce almonds at a lower opportunity cost than other countries, making it more efficient for New Zealand to specialize and export almonds, even if other countries can produce more almonds in absolute terms.

Suppose New Zealand Has a Comparative Advantage Over Other Countries