Suppose that Brazil and Peru exchange coffee and leather.Brazil can produce both coffee and leather more efficiently than Peru, but Brazil can produce coffee more efficiently than leather.Comparative advantage states that:

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Quizplus · Accepted Answer

According to the principle of comparative advantage, each country should produce the good in which it has a lower opportunity cost of production and trade with each other. In this case, since Brazil can produce coffee more efficiently and Peru can produce leather more efficiently, it would be optimal for Brazil to produce coffee, Peru to produce leather, and both countries to engage in trade. This will lead to mutual benefits and increased efficiency in production.

Suppose That Brazil and Peru Exchange Coffee and Leather