The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5

-If Brazil can produce 5 shirts or 4 pounds of beef in a day, and Uruguay can produce 10 shirts or 2 pounds of beef in a day, then Brazil has a comparative advantage in the production of beef.

Question

The table below shows the quantity demanded (in thousands) and quantity supplied (in thousands) of computers in the U.S. and Canada at different prices.Table 20.5
 
-If Brazil can produce 5 shirts or 4 pounds of beef in a day, and Uruguay can produce 10 shirts or 2 pounds of beef in a day, then Brazil has a comparative advantage in the production of beef.

Quizplus · Accepted Answer

To determine comparative advantage, we need to compare the opportunity costs of producing a good in terms of the production of another good. In Brazil, the opportunity cost of producing 4 pounds of beef is 5/4 = 1.25 shirts. In Uruguay, the opportunity cost of producing 2 pounds of beef is 10/2 = 5 shirts. Therefore, Brazil has a lower opportunity cost of producing beef and thus has a comparative advantage in beef production.

The Table Below Shows the Quantity Demanded (In Thousands) and Quantity