Output per hourProduction and Production Estonia Morocco of work Swords 5 2 Belts 3 2 Consumption without Trade Swords 100 40 Belts 60 40 with Trade Swords 200 0 Belts 0 80 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 7-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.

Output per hourProduction and Production Estonia Morocco of work Swords 5 2 Belts 3 2 Consumption without Trade Swords 100 40 Belts 60 40 with Trade Swords 200 0 Belts 0 80 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 7-6 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

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Table 7-6
Output per hourProduction and Production
Estonia
Morocco
O Estonia
of work
Swords
5
2
O Morocco
Belts
3
2
O both countries
O neither country
Consumption without Trade
Swords
100
40
Belts
60
40
with Trade
Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available
labor hours for the production of swords and belts. Table 7-6 shows the output per hour of work, the
production and consumption quantities without trade, and the production numbers with trade.
Swords
200
0
Refer to Table 7-6. Which country has a comparative advantage in producing swords?"
Belts
0
80

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