Consider Two Countries That Can Produce Wheat and Coffee

Multiple Choice

Consider two countries that can produce wheat and coffee.The gains from trade when the two countries have different opportunity costs are realized when

A) production possibility boundaries shift inward.
B) the two countries continue to produce the same quantities of wheat and coffee.
C) each country has an absolute advantage in one of the two commodities.
D) resources are reallocated within the two countries such that each specializes in the production of the good in which it has an absolute advantage.
E) resources are reallocated within the two countries such that each specializes in the production of the good in which it has a comparative advantage.