The table below shows output per hour worked in production of wheat and cloths in the United States and United Kingdom, respectively. US Wheat (bushels per hour) 12 Cloths (yards per hour) 6 UK Wheat (bushels per hour) 6 Cloths (yards per hour) 18 Assess all the statements below and judge which of them is true and which is false. Provide a short justification for your assessment. a) The US has an absolute advantage in the production of wheat. b) The UK has an absolute disadvantage in the production of cloths. c) The opportunity cost of cloths in the US is one-half bushels of wheat. d) The UK has an absolute and comparative advantage in cloth, whereas the US a comparative advantage in wheat. e) There is no basis for trade between these two countries because the UK would benefit more than the US.
3. The table below shows output per hour worked in production of wheat and cloths in the
United States and United Kingdom, respectively.
US
Wheat (bushels per hour) 12
Cloths (yards per hour) 6
UK
Wheat (bushels per hour) 6
Cloths (yards per hour) 18
Assess all the statements below and judge which of them is true and which is false.
Provide a short justification for your assessment.
a) The US has an
b) The UK has an absolute disadvantage in the production of cloths.
c) The
d) The UK has an absolute and
advantage in wheat.
e) There is no basis for trade between these two countries because the UK would benefit more
than the US.
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