Country Jeans Corn Felicidad 8 32 Bellissima 12 24 Felicidad's opportunity cost of producing 1 pair of jeans is (1/2 , 1/4, 2, 4) of corn, and Bellissima's opportunity cost of producing 1 pair of jeans is ( 1/2 , 1/4, 2, 4) of corn. Therefore, (FELICIDADS, BELLISSIMA) has a comparative advantage in the production of jeans, (FELICIDADS, BELLISSIMA) and has a comparative advantage in the production of corn. Suppose that each country
Country Jeans Corn Felicidad 8 32 Bellissima 12 24 Felicidad's opportunity cost of producing 1 pair of jeans is (1/2 , 1/4, 2, 4) of corn, and Bellissima's opportunity cost of producing 1 pair of jeans is ( 1/2 , 1/4, 2, 4) of corn. Therefore, (FELICIDADS, BELLISSIMA) has a comparative advantage in the production of jeans, (FELICIDADS, BELLISSIMA) and has a comparative advantage in the production of corn. Suppose that each country
Country Jeans Corn Felicidad 8 32 Bellissima 12 24 Felicidad's opportunity cost of producing 1 pair of jeans is (1/2 , 1/4, 2, 4) of corn, and Bellissima's opportunity cost of producing 1 pair of jeans is ( 1/2 , 1/4, 2, 4) of corn. Therefore, (FELICIDADS, BELLISSIMA) has a comparative advantage in the production of jeans, (FELICIDADS, BELLISSIMA) and has a comparative advantage in the production of corn. Suppose that each country
Felicidad's opportunity cost of producing 1 pair of jeans is (1/2 , 1/4, 2, 4) of corn, and Bellissima's opportunity cost of producing 1 pair of jeans is
( 1/2 , 1/4, 2, 4) of corn. Therefore, (FELICIDADS, BELLISSIMA) has a comparative advantage in the production of jeans, (FELICIDADS, BELLISSIMA) and has a comparative advantage in the production of corn.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce_______________million pairs per week, and the country that produces corn will produce____________million bushels per week.
Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.