In the "The Global Economy: 'It's a Small World After All'

1. Does the concept of comparative advantage apply to individuals, countries, or both? Explain.

2. Suppose that one day of labor in each country produces the following quantities of fish and cheese:

CountryFish (tons)Cheese(tons)

France8040

Japan20050

Does France have a comparative advantage in the production of fish, cheese, or neither? Explain.

Does Japan have a comparative advantage in the production of fish, cheese, or neither? Explain.

Suppose the countries decide to trade with each other1 ton of cheese for 3 tons of fish.

Would this trade be advantageous to both countries? Explain.