Scenario 20.1 Suppose Labor Productivity Differences Are the Only Determinants of Comparative

question 101

Multiple Choice

Scenario 20.1
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar.
-Refer to Scenario 20.1. Calculate the opportunity cost of producing sugar in Brazil.

• A)Half a pound of coffee
• B)4 pounds of coffee
• C)1 pound of coffee
• D)2 pounds of coffee
• E)One and a half pounds of coffee

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