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2. Labor productivity coefficients for the US and Brazil are given by the following table: Country Wheat per wkr Clothingper wkr Labor (number of workers
2. Labor productivity coefficients for the US and Brazil are given by the following table:
Country
Wheat
per wkr
Clothingper wkr
Labor (number of workers
United States
2
8
100
Brazil
1
2
120
Questions
- Who has theabsolute advantagein wheat?
- What isthe opportunity costof 1 unit of wheat in the US? in Brazil?
- What is the opportunity cost of 1 unit of clothing in the US? in Brazil?
- Who has thecomparative advantagein Wheat? In Clothing?
- Draw the production possibility frontier for the US.(Put Wheat on the Y axis and Clothing on the X axis)
- For Brazil(Put Wheat on the Y axis and Clothing on the X axis)
- Suppose each country decides to split its labor forceequallyon the production of each good. Locate the point on the PPF curve for each country that represents this allocation of labor.
- What's their production and consumption combination # at this point?
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