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Assumptions For country A 100 units of resources available / takes 10 units to produce a ton of wheat / takes 4 units to produce

Assumptions For country A

  • 100 units of resources available / takes 10 units to produce a ton of wheat / takes 4 units to produce a ton of tea

Assumptions For country B

  • 100 units of resources available / takes 4 units to produce a tone of wheat / takes 8 units to produce a ton of tea

How the production may looks like, without trades, with trades (increased tea and wheat production)

Discuss how it related to comparative advantage.

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