England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?If England and Scotland decide to trade, which commodity will Scotland export to England? Explain.If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.

Resources are limited in any economy, but wants are limitless. As a result, a decision must be taken…

Answered: England and Scotland both produce…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?
If England and Scotland decide to trade, which commodity will Scotland export to England? Explain.
If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.

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