How much coffee and wine will each country produce

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Question:Argentina has 10,000 hours of labor/month:

- producing 1 lb. coffee requires 2 hours;

- producing 1 bottle wine requires 4 hours.

Brazil also has 10,000 hours of labor/month:

- producing 1 lb. coffee requires 1 hour;

- producing 1 bottle wine requires 5 hours.

Now suppose that both countries specialize in what they can produce better and trade with each other. How much coffee and wine will each country produce? And which and how much of their products will they exchange with each other (exports and imports)? Explain why each country is willing to accept the amount of exports and imports that you suggest (there can be many possible answers for this part of the question).

Reference no: EM132145475

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