Ecuador and Argentina both produce shrimp and wheat. Ecuador can produce 50 thousand pounds of shrimp or 10 thousand bushels of wheat in a year. Argentina can produce 75 thousand pounds of shrimp or 25 thousand bushels of wheat in a year. Ecuador’s opportunity cost of producing one bushel of wheat is equal to pounds of shrimp. Argentina’s opportunity cost of producing one bushel of wheat is equal to pounds of shrimp. The two countries decide to specialize and trade with each other. The country that produces wheat will sell one bushel of wheat for no less than pounds of shrimp. The other country will pay no more than pounds of shrimp for the one bushel of wheat.
Ecuador and Argentina both produce shrimp and wheat. Ecuador can produce 50 thousand pounds of shrimp or 10 thousand bushels of wheat in a year. Argentina can produce 75 thousand pounds of shrimp or 25 thousand bushels of wheat in a year.
Ecuador’s
Argentina’s opportunity cost of producing one bushel of wheat is equal to pounds of shrimp.
The two countries decide to specialize and trade with each other. The country that produces wheat will sell one bushel of wheat for no less than pounds of shrimp. The other country will pay no more than pounds of shrimp for the one bushel of wheat.
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