Question

The table above lists the number of acres it takes to produce 1 cargo container of oranges and 1 cargo container of bananas in the United States and Costa Rica. Which of the following is true? I. The U.S. has the comparative advantage in producing oranges. II. Costa Rica has the comparative advantage in producing oranges. III. The U.S. has the comparative advantage in producing bananas. IV. Costa Rica has the comparative advantage in producing bananas. (4 points)

Oranges Bananas
United States 4 acres 5 acres
Costa Rica 3 acres 2 acres

Answer 1

B is the correct answer the United States has the comparative advantage in producing oranges

Answer 2

I. The U.S. has the comparative advantage in producing oranges.

IV. Costa Rica has the comparative advantage in producing bananas.

Step-by-step explanation:

Based on the data provided on the number of acres the two companies will utilize to produce either orange or banana. It is obvious that the USA will consume more acres to produce banana than to produce orange. On the other hand, Costa Rica will consume more acres to produce orange than to produce banana.