Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier
-Refer to Figure 3-19.If Chile and Colombia each spends all of its time producing the good in which it has a comparative advantage and the countries agree to trade 7 pounds of coffee for 5 pounds of soybeans,then Chile will consume
A)7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans.
B)7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans.
C)23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans.
D)23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans.

Question

Figure 3-19
Chile's Production Possibilities Frontier
Colombia's Production Possibilities Frontier  
-Refer to Figure 3-19.If Chile and Colombia each spends all of its time producing the good in which it has a comparative advantage and the countries agree to trade 7 pounds of coffee for 5 pounds of soybeans,then Chile will consume
A)7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans. 
B)7 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans. 
C)23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans. 
D)23 pounds of coffee and 7 pounds of soybeans and Colombia will consume 5 pounds of coffee and 11 pounds of soybeans.

Quizplus · Accepted Answer

Chile has a comparative advantage in producing soybeans, and Colombia has a comparative advantage in producing coffee. If they each specialize in producing the good in which they have a comparative advantage and trade 7 pounds of coffee for 5 pounds of soybeans, then Chile will consume 7 pounds of coffee and 7 pounds of soybeans, and Colombia will consume 5 pounds of coffee and 5 pounds of soybeans.

Figure 3-19 Chile's Production Possibilities Frontier