Question

Honduras is one of the world’s leading exporters of bananas each year. Which of the following factors is NOT an incentive for Honduras to export bananas?
A. Honduras has few resources it can devote toward growing bananas.

B. Honduras’ climate helps the country grow bananas faster than other countries.

C. Honduras’ economy specializes in growing bananas.

D. Honduras can grow bananas more cheaply than many other countries can.

Answer 1

The correct answer is A.

Option B-D mention factors which can closely related to the development, by Honduras, of a comparative advantage in the production of bananas: better natural conditions, cheaper production costs, specialization on producing bananas, etc .

A comparative advantage is defined as the superiority that a country or producer enjoys,through which it becomes the most efficient and he is able to elaborate the product with the lowest opportunity cost, and obtain a larger amount of output given the same endownment of resources. Countries or companies specialize on producing the goods or services where they have acquired a comparative advantage.

On the other hand, option A refers to a circumstance that would prevent a country from acquiring a competitive advantage, as it lacks the necessary resources to produce bananas and this would decrease cost-efficiency in production.

Answer 2

Answer: a

Explanation: