Question
Assume that Guyana and Suriname are trading partners. There are only two factors of production (land and labour) in each country and they produce two
Assume that Guyana and Suriname are trading partners. There are only two factors of production (land and labour) in each country and they produce two goods, logs and malta. In autarky, if the cost of logs in Guyana is G$850 per thousand bm3, what is the approximate cost of malta (per thousand barrels)? If the cost of logs in Suriname is Guilder 2000 per thousand bm3, what is the approximate cost of beer in Suriname (per thousand barrels)? Based on the approximate cost of beer describe the countries' relative resource endowments and where comparative advantage would lie.
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