Coffee Salmon Brazil 40 20 Argentina 10 15 The table above shows the maximum amounts of coffee and salmon that Brazil and Argentian can produce if they produce just one good. Evaluate the following statements and point which of them are true: 1. If Brazil has a comparative advantage in coffee production 2. In Brazil, the marginal cost of salmon production is 2 units of coffee 3. In Argentina the marginal cost of coffee production is 1 1/2 units of salmon Which are correct.

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.