Cloth (yard) Rice (bushel) China 70 40 Japan 90 60 (Numbers in the above matrix reflect labor hours per unit of output) What is the oppronity cost of this matrix? Please show your calculation. What trade would you recommend?
Cloth (yard) Rice (bushel) China 70 40 Japan 90 60 (Numbers in the above matrix reflect labor hours per unit of output) What is the oppronity cost of this matrix? Please show your calculation. What trade would you recommend?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
|
Cloth (yard) |
Rice (bushel) |
China |
70 |
40 |
Japan |
90 |
60 |
(Numbers in the above matrix reflect labor hours per unit of output)
What is the oppronity cost of this matrix? Please show your calculation. What trade would you recommend?
Expert Solution
Step 1
In international trade, a country relies on opportunity cost when making trade transaction with other countries. Opportunity cost helps to identify the comparative advantage of a nation in a specific product.
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