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The domestic price of oranges in Turkey, without international trade, is lower than the world price of oranges. This suggests that in the production of oranges:

Select one:

A. Turkey has a comparative advantage over other countries and Turkey will import oranges.
B. Other countries have a comparative advantage over Turkey and Turkey will import oranges.
C. Other countries have a comparative advantage over Turkey and Turkey will export oranges.
D. Turkey has a comparative advantage over other countries and Turkey will export oranges.

Answer :

Option d: Turkey has a comparative advantage over other countries, and Turkey will export oranges.

When the domestic price of a commodity without international trade is lower than the world price of the same commodity, this indicates that the country has a comparative advantage over other countries in the production of that commodity.

Comparative advantage refers to the ability of one country to produce goods and services at a lower opportunity cost than another country.

This enables a country to produce and export more of a commodity than it consumes. The opposite is true for the countries that have a higher opportunity cost of production, and they end up importing that commodity. In the case of Turkey, if the domestic price of oranges without international trade is lower than the world price of oranges, it means that the country can produce oranges more efficiently than other countries.

As a result, Turkey will have a comparative advantage in the production of oranges, which will enable it to export oranges to other countries. This will also enable Turkey to earn foreign exchange and improve its balance of trade.

To learn more about International Trade, visit:

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