In a single year,Argentina can raise 100 tonnes of beef or produce 1 000 boxes of tulips.In the same growing season,Venezuela can raise 50 tonnes of beef or produce 750 boxes of tulips.When the two countries begin trading beef for tulips,we expect the total surplus from beef consumption and production to:

Question

Quizplus · Accepted Answer

Argentina has a comparative advantage in producing beef since it can produce 100 tonnes while only producing 1,000 boxes of tulips. Venezuela has a comparative advantage in producing tulips since it can produce 750 boxes while only producing 50 tonnes of beef. Therefore, it would be mutually beneficial for Argentina to specialize in beef and trade with Venezuela for tulips, and for Venezuela to specialize in tulips and trade with Argentina for beef. As a result, the total surplus from beef consumption and production will rise in Argentina.

In a Single Year,Argentina Can Raise 100 Tonnes of Beef