Figure 3-8

-Refer to Figure 3-8.Chile should specialize in the production of
A) coffee and import soybeans.
B) soybeans and import coffee.
C) both goods and import neither good.
D) neither good and import both goods.

Question

Figure 3-8
 
-Refer to Figure 3-8.Chile should specialize in the production of
A) coffee and import soybeans. 
B) soybeans and import coffee. 
C) both goods and import neither good. 
D) neither good and import both goods.

Quizplus · Accepted Answer

According to the production possibility curve in Figure 3-8, Chile has a comparative advantage in producing soybeans as the opportunity cost of producing one unit of soybean is lower than that of producing one unit of coffee. Therefore, Chile should specialize in producing soybeans and import coffee.

Figure 3-8 -Refer to Figure 3-8.Chile Should Specialize in the Production of in the Production