Comparative advantage in producing sugar

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Reference no: EM13741041

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 34-1. Which country has a comparative advantage in producing sugar?

Select one:

a. Brazil only

b. Chile only

c. Both countries

d. Neither country

e. It cannot be determined with the information given.

Reference no: EM13741041

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