1. The following table shows the production of cows’ milk and potatoes per unit of input in the hypothetical countries of St. Claire and St. Paul. Use the following table to answer the questions. St. ClaireSt. PaulCow’s Milk100 liters50 litersPotatoes150 liters60 kilosa) Which country has the absolute advantage in the production of cows’ milk?b) Which country has the absolute advantage in the production of potatoes?c) What is the opportunity cost of producing one liter of cows’ milk in St. Claire?

Name: 1. The following table shows the production of cows’ milk and potatoes
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Description: 1. The following table shows the production of cows’ milk and potatoes per unit of input in the hypothetical countries of St. Claire and St. Paul. Use the following table to answer the questions. St. ClaireSt. PaulCow’s Milk100 liters50 litersPotatoe

Absolute cost advantage: - it is a principle of international trade given by Adam Smith which shows…

Answered: 1. The following table shows the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. The following table shows the production of cows’ milk and potatoes per unit of input in the hypothetical countries of St. Claire and St. Paul. Use the following table to answer the questions.

	St. Claire	St. Paul
Cow’s Milk	100 liters	50 liters
Potatoes	150 liters	60 kilos

a) Which country has the absolute advantage in the production of cows’ milk?

b) Which country has the absolute advantage in the production of potatoes?

c) What is the opportunity cost of producing one liter of cows’ milk in St. Claire?

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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