England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour. Which country has the absolute advantage in the production of each good? Which country has the comparative advantage? If England and Scotland decide to trade, which commodity will Scotland export to England? Explain. If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour. Which country has the absolute advantage in the production of each good? Which country has the comparative advantage? If England and Scotland decide to trade, which commodity will Scotland export to England? Explain. If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter19: International Trade
Section: Chapter Questions
Problem 3QFR
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- England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
- Which country has the
absolute advantage in the production of each good? Which country has thecomparative advantage ? - If England and Scotland decide to trade, which commodity will Scotland export to England? Explain.
- If a Scottish worker could produce only 1 sweater per hour, would Scotland still
gain from trade ? Would England still gain from trade? Explain.
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