Question

Two countries are trying to decide which product should have an increased production. Both Canada and Costa Rica produce coffee and corn, but it is easier for Canada to raise corn than grow coffee. Costa Rica easily grows coffee, but has a more difficult time growing corn. In comparison with Costa Rica, Canada has

a comparative advantage with corn.

the opportunity to increase their coffee production to better compete with Costa Rica.

the climate to create richer tasting coffee than Costa Rica.

Answer 1

Solution: a comparative advantage with corn

Explanation: A comparative advantage provides a country the ability to sell goods and services at a lower price compared to it's competitors and realize stronger sales margins. As Costa Rica, Canada can raise corn easily than Costa Rica thus holds a comparative advantage with corn.