Business, 14.04.2020 20:33 danielanderson12
Suppose in one year Colombia can produce either 8 thousand pounds of coffee or 4 thousand pounds of cashews. Further suppose that transitioning resources from one industry to the other results in a constant transformation rate, and so Colombia can produce anywhere along the resulting linear frontier. Suppose that Brazil can produce either ten thousand pounds of coffee or ten thousand pounds of cashews, also along a linear PPF.
Which of the following is true?
a. Colombia has a comparative advantage in coffee.
b. Brazil has a comparative advantage in cashews.
c. Brazil has an absolute advantage in cashews.
d. All of the statements are true.
Answers: 3
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Suppose in one year Colombia can produce either 8 thousand pounds of coffee or 4 thousand pounds of...
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