Brazil Can Produce One Unit of Sugar Cane for One

question 79

Multiple Choice

Brazil can produce one unit of sugar cane for one unit of labor and one iPod for eight units of labor, and China can produce one unit of sugar cane for two units of labor and one iPod for four units of labor. Which of the following is TRUE?

• A) Brazil has a comparative advantage in sugar cane production and an absolute advantage in iPod production.
• B) Both countries have a comparative in sugar cane production.
• C) China has an absolute advantage in production of both goods.
• D) Brazil has both a comparative advantage and an absolute advantage in sugar cane production.

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Definitions:

Global Assumptions

Fundamental beliefs that encompass all types of situations.

Collective Assumptions

Shared beliefs or judgments within a group about people, situations, or events, often without direct evidence or explicit agreement.

Specific Assumptions

Specific Assumptions are explicit beliefs or statements taken as true within a particular context or model, serving as a foundation for reasoning or decision-making.

Absolute Assumptions

Premises considered to be universally true without any need for proof, often used as foundational concepts in philosophy or logic.