Please help with this question for parts a-d. Will be sure to leave a review. Th

Question

Please help with this question for parts a-d. Will be sure to leave a review. Thank you in advance!

Colombia's Production Possibilities Chile's Production Possibilities Frontier 20 fie pounds) fin pounds) 18 16 14 12 10 18 16 14 12 10 2 4 6 8 10 12 14 16 18 20 c 2 4 6 10 12 14 16 18 20 e fin pounds (in pounds a. (2 pts.) What is Chile's opportunity cost of coffee production? b. (2 pts.) What is Colombia's opportunity cost of coffee production? c. (2pts.) Chile should specialize in the production of: d. (2 pts.) Colombia should specialize in the production of:

Explanation / Answer

A) chile's opportunity cost of coffee production = 12/16 = 3/4 soybeans

B) Columbia's opportunity cost of coffee production = 6/12 = 1/2 soybeans

C) chile should specialise in soybeans since it's opportunity cost is lower.

Chile's opportunity cost of soybeans = 16/12 = 4/3 coffee

Columbia's opportunity cost of soybeans = 12/6 = 2 coffee

D) Columbia should specialise in coffee production since it's opportunity cost of producing coffee is lower

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