Argentina, 10,000 hours of labor/month:

-Producing 1 pound coffee requires 2 hours

-Producing 1 bottle wine requires 4 hours

Brazil, 10,000 hours of labor/month:

-Producing 1 pound coffee requires 1 hour

-Producing 1 bottle wine requires 5 hours

1. Which country has an absolute advantage in the production of coffee? Why?
2. Complete an opportunity cost matrix, and determine the country with a comparative advantage in coffee and then wine.
3. What is the potential range of the terms of trade with respect to the exchange between coffee and wine? Why is it within the range?