c. In the West, what is the opportunity cost of producing one more unit of food? In the East, what is the opportunity cost of producing one more unit of food? Explain. d. Under free trade, where should East and West produce food and clothing, so as to maximize the production for these two goods? Explain.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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part C D need

5. Consider the following table that presents the labour requirements for production in the
East and West (labour hours per unit of output)
East
West
Food
10
5
Clothing
5
10
Answer the following questions.
a. Does the East have an absolute advantage in clothing production? Does the West
have an absolute advantage in clothing production? Does the East have an absolute
advantage in food production? Does the West have an absolute advantage in clothing
production? Explain.
b. Does the East have a comparative advantage in clothing production? Does the West
have a comparative advantage in clothing production? Does the East have a
comparative advantage in food production? Does the West have a comparative
advantage in clothing production? Explain.
c. In the West, what is the opportunity cost of producing one more unit of food? In the
East, what is the opportunity cost of producing one more unit of food? Explain.
d. Under free trade, where should East and West produce food and clothing, so as to
maximize the production for these two goods? Explain.
Transcribed Image Text:5. Consider the following table that presents the labour requirements for production in the East and West (labour hours per unit of output) East West Food 10 5 Clothing 5 10 Answer the following questions. a. Does the East have an absolute advantage in clothing production? Does the West have an absolute advantage in clothing production? Does the East have an absolute advantage in food production? Does the West have an absolute advantage in clothing production? Explain. b. Does the East have a comparative advantage in clothing production? Does the West have a comparative advantage in clothing production? Does the East have a comparative advantage in food production? Does the West have a comparative advantage in clothing production? Explain. c. In the West, what is the opportunity cost of producing one more unit of food? In the East, what is the opportunity cost of producing one more unit of food? Explain. d. Under free trade, where should East and West produce food and clothing, so as to maximize the production for these two goods? Explain.
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