1-2 (4 pts) Trade in a 2-countries 2-goods setup Table 4 Cloth Wine Country A-9000 hrs labor 1 hr/yd 3 hr/bbl 4 hr/bbl Country B - 16000 hrs labor 2 hr/yd 1. Which country has the comparative advantage in producing wine? A. Country A B. Country B I 2. Which country has the comparative advantage in producing cloth? A. Country A B. Country B

1-2 (4 pts) Trade in a 2-countries 2-goods setup Table 4 Cloth Wine Country A-9000 hrs labor 1 hr/yd 3 hr/bbl 4 hr/bbl Country B - 16000 hrs labor 2 hr/yd 1. Which country has the comparative advantage in producing wine? A. Country A B. Country B I 2. Which country has the comparative advantage in producing cloth? A. Country A B. Country B

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 2SCQ: Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40...

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Similar questions

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
How does comparative advantage lead to gains from trade?
Does intra-industry trade contradict the theory of comparative advantage?
Under what conditions does comparative advantage lead to gains from trade?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?