Question

If brazil gives up 3 automobiles for each ton of coffee it produces, while peru gives up 7 automobiles for each ton of coffee it produces, then:_____.

Answer 1

If brazil gives up 3 automobiles for each ton of coffee it produces, while peru gives up 7 automobiles for each ton of coffee it produces, then Brazil should focus on producing coffee because it has a competitive edge in this area.

What does Brazil have a comparative advantage in?

• Brazil is rich in minerals, especially iron ore, but it also has oil and other basic materials. Although technically speaking they are economic rents rather than comparative advantages, they nonetheless exist and the majority of other nations do not.
• In terms of actual comparative advantage, it is the low-cost producer of a number of agricultural items, most notably sugar, where Brazil is unquestionably the global heavyweight, but also soy, cotton, coffee, and other crops, as well as beef, poultry, and other protein.
• Brazil's issue is not its producing side. In general, they are effective producers. It relates to infrastructure. Usually, the top three producers of most commodities are the US and Brazil.

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