Multiple Choice
Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000 hours of labor. In Chile, an hour produces a pound of jellybeans and 2 hours produce a pound of peanut butter. In Argentina, an hour produces a pound of jellybeans and 3 hours produces a pound of peanut butter. When they do not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. Which country has a comparative advantage in jellybean production?
A) Chile
B) Argentina
C) Neither Argentina nor Chile has a comparative advantage.
D) Both Argentina and Chile have a comparative advantage.
Correct Answer:
Verified
Correct Answer:
Verified
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