Ebenezer and Scrooge are two countries that can trade with each other. There are two items, (H) and (J). There is only one factor of production: labor (measured as working hours per time period). The labor input per produced unit of the two goods can be seen below. The assumptions of the Ricardo model are met. Country: Ebenezer Item H=20 Item J=10 Country: Scrooge Item H: 18 Item J: 6 So the question is: Is the following statement true or false? "Since 10 < 20, Ebenezer has one absolute advantage in the production of good J?

Ebenezer and Scrooge are two countries that can trade with each other. There are two items, (H) and (J). There is only one factor of production: labor (measured as working hours per time period). The labor input per produced unit of the two goods can be seen below. The assumptions of the Ricardo model are met. Country: Ebenezer Item H=20 Item J=10 Country: Scrooge Item H: 18 Item J: 6 So the question is: Is the following statement true or false? "Since 10 < 20, Ebenezer has one absolute advantage in the production of good J?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter21: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

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