1.7. Suppose the table below shows the number of labor hours needed to produce airplanes and automobile in the United States and South Korea, but one of the numbers is unknown.

Number of Hours to Produce One Airplane South Korea United States 2,000 800 Number of Hours to Produce One Auto

?

5 26 • PART 1 • Supply and Demand

a. Without knowing the number of labor hours required to produce an auto in South Korea, you can't figure out which country has the comparative advantage in which good. Can you give an example of a number for the empty cell of the table that would give the United States the comparative advantage in the production of airplanes?

What about South Korea?

b. Who has the absolute advantage in the production of airplanes? What about autos?

c. What exact number would you have to place in the empty cell of the table for it to be impossible that trade between the United States and South Korea could benefit both nations?