Two countries are trying to decide which product should have an increased production. Both Canada and Costa Rica produce coffee and corn, but it is easier for Canada to raise corn than grow coffee. Costa Rica easily grows coffee, but has a more difficult time growing corn. In comparison with Canada, Costa Rica has Group of answer choices

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ewomazinoade ewomazinoade · Answer 1 · 2021-07-25T02:30:03+02:00

Answer:

a comparative advantage in the production of coffee

Explanation:

A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.

Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.

For example, country A produces 10kg of coffee and 5kg of corn. Country B produces 5kg of coffee and 10kg of corn.

for country A,

opportunity cost of producing coffee = 5/10 = 0.5

opportunity cost of producing corn = 10/5 = 2

for country B,

opportunity cost of producing coffee = 5/10 = 0.5

opportunity cost of producing corn = 10/5 = 2

Country A has a comparative advantage in the production of coffee and country B has a comparative advantage in the production of corn