Wagons Tricycles O A. O B. O C. O D. James 16 32 The table above shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles. Which of the following statements is true? Lucy 18 24 Lucy has a comparative advantage in making both products. Lucy has a comparative advantage in making tricycles and James in making wagons. James has a comparative advantage in making both products. Lucy has a comparative advantage in making wagons and James in making tricycles.

Wagons Tricycles O A. O B. O C. O D. James 16 32 The table above shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles. Which of the following statements is true? Lucy 18 24 Lucy has a comparative advantage in making both products. Lucy has a comparative advantage in making tricycles and James in making wagons. James has a comparative advantage in making both products. Lucy has a comparative advantage in making wagons and James in making tricycles.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that France and Switzerland both produce fish and wine. France's opportunity cost of producing a bottle of wine is 5 pounds of fish while Switzerland's opportunity cost of producing a bottle of wine is 11 pounds of fish. By comparing the opportunity cost of producing wine in the two countries, you can tell thatFrance has a comparative advantage in the production of wine andSwitzerland has a comparative advantage in the production of fish. Suppose that France and Switzerland consider trading wine and fish with each other. France can gain from specialization and trade as long as it receives more than5 pounds of fish for each bottle of wine it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than5 bottles of wine for each pound of fish it exports to France. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of fish) would allow both Switzerland and France to gain from…