In Italy, an automobile can be produced by 8 workers in one day and a washing machine

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In Italy, an automobile can be produced by 8 workers in one day and a washing machine by 3 workers in one day. In the United States, an automobile can be produced by 6 workers in one day and a washing machine by 2 workers in one day.

a. Which country has an absolute advantage in the production of automobiles? In washing machines?

b. Which country has a comparative advantage in the production of washing machines? In automobiles?

c. What pattern of specialization results in the greatest gains from trade between the two countries?

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Macroeconomics

ISBN: 9781319245269

6th Edition

Authors: Paul Krugman, Robin Wells

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Question Posted: Feb 16, 2024 04:00 AM

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In Italy, an automobile can be produced by 8 workers in one day and a washing machine

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a The United States has an absolute advantage in automobile production because it takes fewer Americ...View the full answer

Macroeconomics

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