If the world price of cotton is less than the price that would occur domestically without trade, then a country will:_________.
a) export cotton.
b) import cotton.
c) decrease its demand for cotton, and increase its demand for cotton substitutes.
d) increase its demand for cotton, and decrease its demand for cotton substitutes.

Respuesta :

Answer: b) import cotton.

Explanation:

If the international price is cotton is less than the price that a country produces it at, it is best that the country imports the cotton than produce it because they do not have a competitive advantage in producing the cotton.

Should they then import, the resources that were being used to produce the cotton can be used on other things that they do have competitive advantage in.