Final answer:
Brazil has the absolute advantage in beef production, and the United States has the absolute advantage in auto production. Brazil's opportunity cost of producing one pound of beef is 1/10th of an auto, while in the United States, it is 3/4 of an auto. These production and opportunity cost differences suggest beneficial trade specialization between the two countries.
Step-by-step explanation:
When analyzing the production capabilities of Brazil and the United States, we can compare which country has an absolute advantage in producing different goods. An absolute advantage refers to the ability of a country to produce a greater quantity of a good using the same amount of resources compared to another country. In this case, Brazil can produce 100 pounds of beef or 10 autos, whereas the United States can produce 40 pounds of beef or 30 autos. Therefore, Brazil has the absolute advantage in beef production, and the United States has the absolute advantage in auto production.
Furthermore, the opportunity cost of a good is what must be given up to obtain that good. For Brazil, the opportunity cost of producing one pound of beef is equated to 1/10th of an auto, since they could have produced 10 autos instead of 100 pounds of beef. For the United States, the opportunity cost of producing one pound of beef is higher, at 3/4 of an auto, indicating that the United States would forgo more in car production to produce the same amount of beef compared to Brazil.
These differences in absolute advantage and opportunity costs may lead to trade implications. Each country may benefit from specializing in the production of goods for which they hold an absolute advantage and trading with each other to obtain the goods they are less efficient at producing. This trade can allow for greater overall efficiency and the potential for both countries to enjoy a higher quantity and variety of goods.