In a single year, Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Venezuela c

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In a single year, Argentina can raise 100 tons of beef or produce 1,000 boxes of tulips. In the same growing season, Venezuela c

an raise 50 tons of beef or produce 750 boxes of tulips. When the two countries begin trading beef for tulips, we expect the price of beef in Venezuela to_______________.
A. to remain at the autarky price.B. to be 10 boxes of tulips.C. to fall.D. to rise.

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1 answer:

Free_Kalibri [3.7K] · Answer 1 · 2026-04-02T00:32:55+03:00

Answer:

C) to decrease

Explanation:

Due to Argentina’s ability to produce 1 ton of beef for the equivalent cost of 10 boxes of tulips, and Venezuela needing 15 boxes of tulips for that same ton, Venezuelan beef is comparatively more expensive than Argentine beef by 5 boxes. As trade commences, Argentina will offer beef to Venezuela at a lower rate until the price of Venezuelan beef aligns with that of Argentina's beef.