Cheese Wine aLc =1 hour/kg aw = 2 hours/gallon Home Foreign a'ic= 6 hours/lb a'iw = 3 hours/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign*) country has an absolute advantage? Show in which product does the Home (Foreign*) country has comparative advantage?

Cheese Wine aLc =1 hour/kg aw = 2 hours/gallon Home Foreign a'ic= 6 hours/lb a'iw = 3 hours/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign) country has an absolute advantage? Show in which product does the Home (Foreign) country has comparative advantage?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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