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7 August, 03:52

Colombia produces coffee with less labor and land than any other country; it therefore necessarily has: A. a comparative advantage in coffee production. B. both a comparative and absolute advantage in coffee production. C. an absolute advantage and comparative disadvantage in coffee production. D. an absolute advantage in coffee production

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  1. 7 August, 06:34
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    Answer: Option (d) is correct.

    Explanation:

    A country has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodity is lower in that country as compared to the other country.

    A country has an absolute advantage in producing a commodity if less resources are required to produce a unit of a commodity as compared to the other country.

    Therefore, Colombia has an absolute advantage in producing coffee.
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