Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

10. The following figures represent the amount of bananas and sugarcane that Panama and Honduras can produce with a fixed amount of factor inputs. Bananas

image text in transcribed
10. The following figures represent the amount of bananas and sugarcane that Panama and Honduras can produce with a fixed amount of factor inputs. Bananas Sugarcane Panama 100 50 Honduras 160 40 a. Which country has the absolute advantage in bananas? Which country has the absolute advantage in sugarcane? Explain how you arrive at that answer? ( /3) b. Explain how to calculate per unit opportunity cost. What is Panama's opportunity cost for producing one unit of bananas? What is Honduras's opportunity cost for producing one unit of sugarcane? ( /3) c. Which country has the comparative advantage in bananas? Which country has the comparative advantage in sugarcane? Explain how you got your answers ( /3) d. Identify a terms of trade that benefits both countries? Explain why this will benefit Panama ( /3)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Commercial Fishing On The Outer Banks

Authors: R Wayne Gray, Nancy Beach Gray

1st Edition

1439667055, 9781439667057

More Books

Students also viewed these Economics questions

Question

How to Calculate the Regression Line

Answered: 1 week ago

Question

8. What are the costs of collecting the information?

Answered: 1 week ago