The table shows the production possibilities for two countries, Colombia and Bolivia, which produce natural gas and
Question:
The table shows the production possibilities for two countries, Colombia and Bolivia, which produce natural gas and soybeans. Ceteris paribus, based on this information and assuming constant opportunity costs for simplicity, which of the following trades would be possible and would make both countries better off?
a. Colombia trades away 100 units of soybeans for 250 units of natural gas from Bolivia.
b. Bolivia trades away 300 units of soybeans for 200 units of natural gas from Colombia.
c. Bolivia trades away 100 units of soybeans for 250 units of natural gas from Colombia.
d. Bolivia trades away 100 units of soybeans for 100 units of natural gas from Colombia.
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To determine which trade would be possible and make both countries better off we should consider the concept of comparative advantage Comparative adva...View the full answer
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Related Book For 
Introduction To Economics Social Issues And Economic Thinking
ISBN: 9780470574782
1st Edition
Authors: Wendy A. Stock
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