Question
Argentina, 10,000 hours of labor/month: -Producing 1 pound coffee requires 2 hours -Producing 1 bottle wine requires 4 hours Brazil, 10,000 hours of labor/month: -Producing
Argentina, 10,000 hours of labor/month:
-Producing 1 pound coffee requires 2 hours
-Producing 1 bottle wine requires 4 hours
Brazil, 10,000 hours of labor/month:
-Producing 1 pound coffee requires 1 hour
-Producing 1 bottle wine requires 5 hours
- Which country has an absolute advantage in the production of coffee? Why?
- Complete an opportunity cost matrix, and determine the country with a comparative advantage in coffee and then wine.
- What is the potential range of the terms of trade with respect to the exchange between coffee and wine? Why is it within the range?
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International Marketing And Export Management
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
8th Edition
1292016922, 978-1292016924
