2) You have the following information concerning the production of wheat and cloth in the United States and the United Kingdom: Labor Hours Required to Produce One Unit United Kingdom United States Wheat 2 1 Cloth 6. a) What is the opportunity cost of producing a unit of wheat in the United Kingdom? In the United States? b) Which country has an absolute advantage in producing wheat? In producing cloth? c) Which country has a comparative advantage in producing wheat? In producing cloth? d) Which country should specialize in producing wheat? In producing cloth?

2) You have the following information concerning the production of wheat and cloth in the United States and the United Kingdom: Labor Hours Required to Produce One Unit United Kingdom United States Wheat 2 1 Cloth 6. a) What is the opportunity cost of producing a unit of wheat in the United Kingdom? In the United States? b) Which country has an absolute advantage in producing wheat? In producing cloth? c) Which country has a comparative advantage in producing wheat? In producing cloth? d) Which country should specialize in producing wheat? In producing cloth?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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i am having trouble with this question macroeconmics chapter 5 question 3
CHOOSE ONLY ONE OPTION FROM EACH PLEASE. Be aware that the numbers in the table reveal the labour HOURS needed to produce ONE unit of the good.
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1. Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000. a) Which country has the comparative advantage in food? In fuel? Explain. b) Which good(s) should each country specialize in? c) Discuss the benefits of specialization for each country.
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