Question

Assume that because of soil and climatic conditions, Brazil is more efficient in the production of coffee than the United States. At the same time, the United States is more efficient in the production of apples than Brazil. Each of these countries can be said to have a(n) _____.

Answer 1

Answer:

Each of these countries can be said to have a comparative advantage.

Explanation:

According to David Ricardo's theory, comparative advantage is the ability of a person, business or country, to produce a specific good using fewer resources than the others.

This is one of the main foundations of international trade. Each country will specialize in those activities they are the most efficient in order to decrease prices, and at the same time, they will import the products they are inefficient in terms of production.