Question 1 Problems and Applications Morocco and Tunisia each has 50,000 hours of labor per month. In Morocco, - producing one table of wood requires 6 hours - producing one bottle of olive oil requires 24 hours In Tunisia, producing one table of wood requires 4 hours - producing one bottle of olive oil requires 20 hours Answer the below questions: a) Which country has an absolute advantage in the production of wooden table? Which country has an absolute advantage in the production of olive oil? Explain the reasons in both scenarios. (using table to show your answer is recommended). b) As per the absolute advantage principle, do you think that there is a chance to start international trade between the two countries? Why? c) For Morocco, what is opportunity cost of producing a bottle of olive oil? For Tunisia, what is the opportunity cost of producing a bottle of olive oil? Show your calculations.

Question 1 Problems and Applications Morocco and Tunisia each has 50,000 hours of labor per month. In Morocco, - producing one table of wood requires 6 hours - producing one bottle of olive oil requires 24 hours In Tunisia, producing one table of wood requires 4 hours - producing one bottle of olive oil requires 20 hours Answer the below questions: a) Which country has an absolute advantage in the production of wooden table? Which country has an absolute advantage in the production of olive oil? Explain the reasons in both scenarios. (using table to show your answer is recommended). b) As per the absolute advantage principle, do you think that there is a chance to start international trade between the two countries? Why? c) For Morocco, what is opportunity cost of producing a bottle of olive oil? For Tunisia, what is the opportunity cost of producing a bottle of olive oil? Show your calculations.

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Description: Question 1 Problems and ApplicationsMorocco and Tunisia each has 50,000 hours of laborper month.In Morocco,- producing one table of wood requires 6 hours- producing one bottle of olive oil requires 24 hoursIn Tunisia,- producing one table of wood re

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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