Consider the Following Table

Question 32

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Consider the following table. Consider the following table.   I. Which country has an absolute advantage in wheat production? II. Which country has an absolute advantage in cloth production? III. Which country has a comparative advantage in wheat production? IV. Which country has a comparative advantage in cloth production? V. In what range must the international price of wheat fall? VI. Which country is likely to gain more from trade if the international price of wheat is 7/5 bushel per yard of cloth? Answer Key I. Which country has an absolute advantage in wheat production?
II. Which country has an absolute advantage in cloth production?
III. Which country has a comparative advantage in wheat production?
IV. Which country has a comparative advantage in cloth production?
V. In what range must the international price of wheat fall?
VI. Which country is likely to gain more from trade if the international price of wheat is 7/5 bushel per yard of cloth?
Answer Key

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