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Suppose that in Colombia, one unit of labor can produce 8 tons of papayas

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(its a multiple choice);Suppose that in Colombia, one unit of labor can produce 8 tons of papayas or 2 tons of bananas while in Brazil, one unit of labor can produce either 4 tons of papayas or 1 ton of bananas. Given this information, which of the following statements is true?;A) Columbia has a comparative advantage in producing papayas, but not bananas.;B) Columbia has a comparative advantage in producing papayas and bananas.;C) These countries would increase combined consumption if they specialized and traded.;D) These countries cannot gain from trading.

 

Paper#31023 | Written in 18-Jul-2015

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