At One Time, Most of the Cars Produced in Mexico

Multiple Choice

At one time, most of the cars produced in Mexico were sold in Mexico. Today, however, Mexico both exports and imports cars. How can comparative advantage explain these data?

A) It cannot; comparative advantage predicts that a country either exports a product or imports it, not both.
B) The pattern is not due to comparative advantage but to government restrictions on production.
C) Mexico has a comparative disadvantage in automobiles.
D) Mexico specializes in the production of high-end cars, which it exports, and imports low-end cars that can be produced at lower cost elsewhere.