Country A has a climate well-suited for agriculture, but few energy resources. Country B is arid but has plentiful access to oil. Which situation will benefit both countries the most?
A.
Country A produces agricultural goods, Country B produces oil, and the countries engage in trade.
B.
Country A produces agricultural goods, Country B produces oil, and the countries do not engage in trade.
C.
Both countries produce agricultural goods and oil, and the countries do not engage in trade.
D.
Both countries produce agricultural goods and oil, and the countries engage in trade.
D. Both countries produce agricultural goods and oil, and the countries engage in trade.
This situation would benefit both countries the most as they can specialize in producing what they are best at and then trade with each other to obtain the resources they lack. Country A can focus on agriculture and trade their products with Country B for oil, while Country B can focus on oil production and trade with Country A for agricultural goods. This way, both countries can maximize their resources and benefit from each other's comparative advantages.