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 What is the opportunity cost of 1 computer in the US? ____ __________ In the ROW? ______ ____________Who has the comparative advantage in airplanes? ________ Why?In computers? ______ Why?

US opportunity cost of producing 1 computer and in US can be calculated as follows: Thus, the…

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

What is the opportunity cost of 1 computer in the US? ____ __________

In the ROW? ______ ____________

Who has the comparative advantage in airplanes? ________ Why?

In computers? ______ Why?

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