Scenario 20.2 Suppose Labor Productivity Differences Are the Only Determinants of Comparative

Scenario 20.2
Suppose labor productivity differences are the only determinants of comparative advantage, and both Egypt and Ghana produce only corn and cocoa. In Egypt, 10 bushels of corn or 15 pounds of cocoa can be produced in a day. In Ghana, one day of labor can be used to produce either 2 bushels of corn or 8 pounds of cocoa.
-The Dutch Disease had occurred in Netherlands because:

A) the Netherlands government had borrowed heavily from the World Bank to meet its Balance of Payment deficits.
B) the price of the primary commodities declined in the international market.
C) the demand for natural gas exports from Netherlands increased substantially.
D) the currency of Netherlands depreciated in the international market.
E) the price of the commodities manufactured by Netherlands declined in the international market.

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