Asked by Patricia Czupryna on Apr 27, 2024

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If Brazil gives up three automobiles for each ton of coffee it produces,while Peru gives up seven automobiles for each ton of coffee it produces,then Brazil has a comparative advantage in _____ production and should specialize in _____.

A) automobile;coffee
B) coffee;automobiles
C) coffee;coffee
D) automobile;automobiles

Comparative Advantage

The ability of an individual or country to produce a good or service at a lower opportunity cost than another producer, supporting international trade.

Automobiles

Self-propelled vehicles designed primarily for passenger transportation.

Coffee

A beverage made from roasted and ground coffee beans, widely consumed globally and known for its stimulating effect due to caffeine.

  • Comprehend the function of opportunity costs in establishing comparative advantages.
  • Identify the advantages of specialization and trade within a bipartite framework.
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ZK
Zybrea KnightMay 02, 2024
Final Answer :
C
Explanation :
coffee;coffeeBrazil has a lower opportunity cost in producing coffee compared to Peru (giving up 3 automobiles vs. 7 automobiles for each ton of coffee), indicating Brazil has a comparative advantage in coffee production. Therefore, Brazil should specialize in coffee.