Oranges

Apples

Lebanon

40

80

Egypt

90

50

According to the above table, the capacity with all available resources (working hours/ month) in Lebanon is enough to produce 40 thousand tons of oranges or 80 thousand tons of apples. On the other hand, the capacity with all available resources (working hours/ month) in Egypt is enough to produce 90 thousand tons of oranges or 40 thousand tons of apples.

Answer the following:

1-Which country has the absolute advantage in oranges production and which has the absolute advantage in apples?

2-Calculate the opportunity cost (OP) for the two countries in producing both Products?

3-Based on your OP calculations, which country has the comparative advantage in producing each product?

4-Do you see any opportunity of specialization and trade between the to countries? If any, who specializes in producing what?