Directions: Calculate the per unit opportunity cost for soybeans and sugar in the United States and Brazil and then use that information to answer the questions that follow. Calculate the per unit opportunity cost of producing Soybeans Calculate the per unit opportunity cost of producing Sugar 5.4 Soybeans Sugar United States 108 tons 0.18 20 tons Brazil 86 tons 0.11 10 tons 8.6 2 Who has the absolute advantage in producing soybeans? Why? 3 Who has the comparative advantage in producing soybEans? Why (use data from the chart to exxplain your answer)? 4. Who has the comparative advantage in producing sugar? Why (use data from the chart to explain your answer)?

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Comparative Advantage and Absolute Advantage Analysis

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