Two countries are trying to decide which product should have an increased production. Both Canada and Costa Rica produce coffee and corn, but it is easier for Canada to raise corn than grow coffee. Costa Rica easily grows coffee, but has a more difficult time growing corn. In comparison with Canada, Costa Rica has Group of answer choices the opportunity to increase their corn production to better compete with Canada. a comparative advantage with coffee. A higher opportunity cost for coffee. the climate to grow larger corn plants than Canada.

Question

Clyde

Business

6 November, 12:44

Two countries are trying to decide which product should have an increased production. Both Canada and Costa Rica produce coffee and corn, but it is easier for Canada to raise corn than grow coffee. Costa Rica easily grows coffee, but has a more difficult time growing corn. In comparison with Canada, Costa Rica has Group of answer choices the opportunity to increase their corn production to better compete with Canada. a comparative advantage with coffee. A higher opportunity cost for coffee. the climate to grow larger corn plants than Canada.

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Answers (1)

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Lauren Callahan · Answer 1

The correct answer is letter "B": a comparative advantage with coffee.

Explanation:

Comparative advantage is the advantage an individual, organization or country has over others. It does not mean the individual has an absolute advantage over its competitors but it has found ways to produce at lower opportunity costs than its rivals. The concept was introduced by English economist David Ricardo (1772-1823) who believed countries should produce those goods they are best at manufacturing and import those that it is not efficient at producing.

Therefore, Costa Rica has a comparative advantage over Canada on coffee production since that commodity easily grows in Costa Rica.