Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
-Refer to Figure 3-19.If Chile and Colombia switch from each country dividing its time equally between the production of coffee and soybeans to each country spending all of its time producing the good in which it has a comparative advantage,then total production of soybeans will increase by
A)3 pounds.
B)6 pounds.
C)9 pounds.
D)12 pounds.

Question

Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier  
-Refer to Figure 3-19.If Chile and Colombia switch from each country dividing its time equally between the production of coffee and soybeans to each country spending all of its time producing the good in which it has a comparative advantage,then total production of soybeans will increase by
A)3 pounds. 
B)6 pounds. 
C)9 pounds. 
D)12 pounds.

Quizplus · Accepted Answer

From the graph, we can see that Chile has a comparative advantage in producing soybeans and Colombia has a comparative advantage in producing coffee. If both countries allocate all their resources in the production of the good in which they have a comparative advantage, Chile will produce 15 pounds of soybeans and Colombia will produce 30 pounds of coffee. This will result in an increase of 3 pounds of soybeans (15-12) compared to the initial division of labor where each country produces an equal amount of coffee and soybeans. Therefore, the answer is A) 3 pounds.

Figure 3-19 Chile's Production Possibilities Frontier