Assume That Australia Has a Comparative Advantage Over France in the Production

Multiple Choice

Assume that Australia has a comparative advantage over France in the production of pencils, and that France has a comparative advantage over Australia in the production of haircuts. What is a practical reason why Australia and France might NOT trade?

A) The high transportation costs for travel between the countries might discourage trade in haircuts.
B) Given current communication technologies, it is unlikely that people in one country could learn of the hairstyles available in the other country.
C) Pencils are very fragile and are likely to be damaged during shipment.
D) Australian pencil makers might resist the import of pencils into Australia even though comparative advantage indicates Australia should import pencils.