Final answer:
Comparative advantage is used to determine the mutually beneficial range of capital goods that Cuba could offer to the Dominican Republic in exchange for 2 units of consumer goods.
Step-by-step explanation:
In this scenario, the Dominican Republic is offering Cuba 2 units of consumer goods for trade. To determine the mutually beneficial range of capital goods that Cuba could offer in return, we need to analyze the concept of comparative advantage. Comparative advantage refers to a country's ability to produce a good or service at a lower opportunity cost than another country. In this case, if Cuba has a comparative advantage in producing capital goods, it should specialize in that area and offer a certain quantity of capital goods to the Dominican Republic in exchange for the 2 units of consumer goods.
For example, let's say that Cuba can produce 4 units of capital goods or 8 units of consumer goods. In this case, the opportunity cost of producing 1 unit of consumer goods is 0.5 units of capital goods (4 capital goods divided by 8 consumer goods). On the other hand, the opportunity cost of producing 1 unit of capital goods is 2 units of consumer goods (8 consumer goods divided by 4 capital goods). Since the Dominican Republic is offering 2 units of consumer goods, it would be mutually beneficial for Cuba to offer a quantity of capital goods as long as the opportunity cost is below 2 units of consumer goods and above 0.5 units of capital goods. This range allows both countries to benefit from the trade.