Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
-Refer to Figure 3-19.Chile has a comparative advantage in the production of
A)coffee and Colombia has a comparative advantage in the production of soybeans.
B)soybeans and Colombia has a comparative advantage in the production of coffee.
C)both goods and Colombia has a comparative advantage in the production of neither good.
D)neither good and Colombia has a comparative advantage in the production of both goods.

Question

Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier  
-Refer to Figure 3-19.Chile has a comparative advantage in the production of
A)coffee and Colombia has a comparative advantage in the production of soybeans. 
B)soybeans and Colombia has a comparative advantage in the production of coffee. 
C)both goods and Colombia has a comparative advantage in the production of neither good. 
D)neither good and Colombia has a comparative advantage in the production of both goods.

Quizplus · Accepted Answer

Chile's PPF has a steeper slope for soybeans than for coffee, indicating that Chile has a comparative advantage in producing coffee. On the other hand, Colombia's PPF has a steeper slope for coffee than for soybeans, indicating that Colombia has a comparative advantage in producing coffee. Therefore, Chile has a comparative advantage in soybeans and Colombia has a comparative advantage in coffee, making option B the correct answer.

Figure 3-19 Chile's Production Possibilities Frontier