Question
Brazil can produce one unit of sugar cane for one unit of labor and one iPod for eight units of labor, and China and can
Brazil can produce one unit of sugar cane for one unit of labor and one iPod for eight units of labor, and China and can produce one unit of sugar cane for two units of labor and one iPod for four units of labor. Which is of the following is true?
A. Before trade, China's opportunity cost of one unit of sugar can is two iPods.
B. China has an absolute advantage in sugar cane production
C. Both parties benefit if they specialize and trade at terms of one unit of sugar cane for two iPods
D. With trade, Brazil should specialize in sugar cane and China in iPods
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