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Macroeconomics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188131Macroeconomics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188131 Exercise 4
ABSOLUTE AND COMPARATIVE ADVANTAGE You have the following information concerning the production of wheat and cloth in the United States and the United Kingdom:
Labor Hours Required to Produce One Unit
a. What is the opportunity cost of producing a unit of wheat in the United Kingdom? In the United States?
b. Which country has an absolute advantage in producing wheat? In producing cloth?
c. Which country has a comparative advantage in producing wheat? In producing cloth?
d. Which country should specialize in producing wheat? In producing cloth?
Labor Hours Required to Produce One Unit
a. What is the opportunity cost of producing a unit of wheat in the United Kingdom? In the United States?b. Which country has an absolute advantage in producing wheat? In producing cloth?
c. Which country has a comparative advantage in producing wheat? In producing cloth?
d. Which country should specialize in producing wheat? In producing cloth?
Explanation
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a.Opportunity cost:
Number of hours req...
Macroeconomics 10th Edition by William McEachern
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