Assume, for France, that the domestic price of tea without international trade is higher than the world price?

Question

a. other countries have a comparative advantage over France in producing tea.
b. France has an absolute advantage over other countries in producing tea.
c. France will export tea if international trade is allowed.
d. French tea buyers will become worse off if international trade is allowed.

Answer 1

Answer a.

France has no efficiency in tea manufacturing, if the cost of production is being transfered to the consumer price. If the world price is lower, means other counties have a comparative advantage in tea production, bcoz they can make produce tea at lower opportunity cost, so they sell lower price.France should trade for tea, so that local buyers wil benefit.