Question

1. In Mexico, it takes 10 resources to produce 1 ton of cocoa and 13.5 resources to produce 1 ton of rice. In Indonessia, it takes 40 resources to produce 1 ton of cocoa and 20 resources to produce 1 ton of rice. Mexico has a comparative advantage over Indonesia in

   		both cocoa and rice.
   		cocoa.
   		both cocoa and rice if combined.
   		rice.
   		neither cocoa nor rice.

Answer 1

Answer
Comparative advantage depends on the opportunity cost of the good
The opportunity cost of good =required resources for the good/required resources for other good

The opportunity cost of Cocoa for Mexico=10/13.5=0.740740741
=0.74 rice units
The opportunity cost of Cocoa for Indonesia =40/20=2 rice units
the opportunity cost of Cocoa is ower for Mexico so Mexico has a comparative advantage in Cocoa and Indonesia has the comparative advantage in rice

option 2
Cocoa