Suppose that US and France produce cars and wine at different speeds wine cars 2 days/ car 3 days/ car France 10 minutes/ 1 bottle US 60 minutes/ 1 bottle (a) draw PPF for France and for US (b) calculate opportunity costs for both wine and cloths for both countries (c) which country has absolute advantage and in which product? (d) which country has comparative advantage and in which product? (e) if they decide to trade who will export wine and who will export cars? (f) at what price?

Suppose that US and France produce cars and wine at different speeds wine cars 2 days/ car 3 days/ car France 10 minutes/ 1 bottle US 60 minutes/ 1 bottle (a) draw PPF for France and for US (b) calculate opportunity costs for both wine and cloths for both countries (c) which country has absolute advantage and in which product? (d) which country has comparative advantage and in which product? (e) if they decide to trade who will export wine and who will export cars? (f) at what price?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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