8. An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce
of coffee in 60 minutes, while an average worker
in Peru can produce an ounce of soybeans in
50 minutes and an ounce of coffee in 75 minutes.
a. Who has the absolute advantage in coffee?
Explain.
b. Who has the comparative advantage in cof-
fee? Explain
c. If the two countries specialize and trade
with each other, who will import coffee?
Explain.
d. Assume that the two countries trade and that
the country importing coffee trades 2 ounces
of soybeans for 1 ounce of coffee. Explain why
both countries will benefit from this trade.