Suppose that in Columbia one unit of labor can produce 4 ton
Suppose that in Columbia, one unit of labor can produce 4 tons of papayas or 2 tons of bananas, while in Brazil one unit of labor can produce either 2 tons of papayas or 4 tons of bananas. If each country has 2 units of labor, which of the following consumption combinations can be attained only with specialization and trade?
A. Brazil consumes 8 tons of bananas and no papayas.
B. Columbia consumes 8 tons of papayas and no bananas.
C. Columbia consumes 4 tons of papayas and 4 tons of bananas.
D. Brazil consumes 2 tons of papayas and 4 tons of bananas.
Solution
C. Columbia consumes 4 tons of papayas and 4 tons of bananas.
