Colombia has an absolute advantage in producing coffee relative to the United States.

A. Coffee cannot be grown in the United States.

B. Government trade disincentives regarding Colombian coffee make such trade possible.

C. Colombia has a comparative advantage in producing coffee relative to the United States.

Question

Business

Keely Li

2 May, 00:00

Colombia has an absolute advantage in producing coffee relative to the United States.

A. Coffee cannot be grown in the United States.

B. Government trade disincentives regarding Colombian coffee make such trade possible.

C. Colombia has a comparative advantage in producing coffee relative to the United States.

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Answers (1)

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Noe Alexander · Answer 1

The correct answer is letter "C": Colombia has a comparative advantage in producing coffee relative to the United States.

Explanation:

A comparative Advantage is a person, company, or country's ability to produce a good or service at a lower cost of production than its competitors. Possessing a comparative advantage does not mean that one entity is absolutely better at producing a good or service than another.

Thus, Colombia has a comparative advantage in producing coffee relative to the United State because its lands and weather allows the growing of coffee crops better than in the U. S.