Assume that our world consists of only two countries: the United States and the Rest of the World (ROW). Both of these countries produce airplanes and computers. The amounts of each good produced during an hour in each country are provided in the table below. USROWAirplanes54Computers1510 Based on this table, who has the absolute advantage in airplanes? ______In computers? ______What is the opportunity cost of 1 airplane:in the US? __ _____________in the ROW? ______________

The US produces 5 Airplanes and 15 Computers in an hour. ROW produces 4 Airplanes and 10 Computers…

Answered: Assume that our world consists of only…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that our world consists of only two countries: the United States and the Rest of the World (ROW). Both of these countries produce airplanes and computers. The amounts of each good produced during an hour in each country are provided in the table below.

	US	ROW
Airplanes	5	4
Computers	15	10

Based on this table, who has the absolute advantage in airplanes? ______

In computers? ______

What is the opportunity cost of 1 airplane:

in the US? __ _____________

in the ROW? ______________

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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