Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000hours of labor. In Chile, an hour produces a pound of jellybeans and 2 hours produce a pound of peanut butter. InArgentina, an hour produces a pound of jellybeans and 3 hours produce a pound of peanut butter. When they do not tradewith each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400pounds of jellybeans and 200 pounds of peanut butter. In order for Chile to gain from trade, the price of jellybeans mustbe less than:O 1/3 pound of peanut butter per pound of jellybeans.1/2 pound of peanut butter per pound of jellybeans.O 3 pounds of peanut butter per pound of jellybeans.O 2 pounds of peanut butter per pound of jellybeans.

Comparative advantage is the ability to produce goods and services at a lower opportunity cost than…

Answered: Chile and Argentina each produce…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Sam can brew 5 gallons of root beer in an hour or he can make 4 pizzas in an hour. Ben can brew 7 gallons of root beer in an hour or he can make 5 pizzas in an hour. Who has an absolute advantage in making pizza? [ Select ] ["Ben", "Sam"] Who has a comparative advantage in making pizza? [ Select ] ["Sam", "Ben"]
Q.1
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If a country can produce more of a good than other countries with a given amount of resources, we say that country has the| [ Select ] and if a country has less to lose in producing a good than other countries do, we say that country has [ Select ]
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