Final answer:
The student question relates to trade theory and specialization when countries have absolute advantages in specific products. The correct answer is E: two of A, B, and C, specifically A and C, indicating that Ecuador should specialize and trade for wheat while Argentina should specialize and trade for coffee.
Step-by-step explanation:
According to trade theory, when each country has a product that others need and it can produce it with fewer resources than another, it is beneficial for these countries to trade. In the case of Ecuador and Argentina, with Ecuador having an absolute advantage in coffee and Argentina in wheat, the answer incorporates the concepts of specialization and comparative advantage.
If we apply these concepts to the question asked by the student:
- Ecuador should focus production on coffee and trade for wheat (which implies specialization and trade based on absolute advantage).
- Argentina should focus on producing wheat and trade for coffee (which also implies specialization and trading based on absolute advantage).
Therefore, the correct answer to the question is E: two of A, B, and C. Specifically, A and C are correct, as they suggest that each country should specialize in the production of the good in which it has an absolute advantage and trade for the other.
However, this rationale does not consider Bolivia, and whether Ecuador should import from Bolivia is not addressed directly by the statement of the question concerning absolute advantages between Ecuador and Argentina.