What is the opportunity cost of a pair of shoes in Mexico?What is the opportunity cost of a pair of shoes in Nicaragua ?Which country has a comparative advantage in the production of shoes?Which country has a comparative advantage in the production of clothing?In this example, the country of Mexico should export ----------and import ----------------. Consider the following table, which shows unspecialized productive capabilities of sets of workers in Mexico and Nicaragua:MexicoOutput90ProductShoesClothing30NicaraguaOutput1510

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the opportunity cost of a pair of shoes in Mexico?
What is the opportunity cost of a pair of shoes in Nicaragua ?
Which country has a comparative advantage in the production of shoes?
Which country has a comparative advantage in the production of clothing?
In this example, the country of Mexico should export ----------and import ----------------.

Consider the following table, which shows unspecialized productive capabilities of sets of workers in Mexico and Nicaragua:
Mexico
Output
90
Product
Shoes
Clothing
30
Nicaragua
Output
15
10

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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