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

question 39

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. What is the opportunity cost of producing coffee in Chile?

• A)Half a pound of sugar
• B)Two-fifth of a pound of sugar
• C)2 pounds of sugar
• D)One-third of a pound of sugar
• E)4 pounds of sugar

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Definitions:

Fixed-Position Layout

A system that addresses the layout requirements of stationary projects.

Job Lots

Groups or batches of parts processed together.

Product Differentiation Strategy

A marketing strategy that businesses use to distinguish their products from those of competitors, typically through unique features, performance, or quality.

Process-Oriented Layout

A layout design primarily used in manufacturing operations where machinery and equipment are organized according to the specific process or sequence of operations.