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Q1. Suppose that in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or
Q1. Suppose that in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker can produce 100 shirts or 10 computers. (a) In America, what is the opportunity cost of producing an additional shirt (measured in terms of foregone computers)? In China, what is the opportunity cost of producing an additional shirt (measured again in terms of foregone computers}? (13) Suppose that America and China each have 100 workers. If each country devotes half its workers to each industry, how many shirts and computers does each country produce? What is world output of shirts and computers? (C) Who has absolute advantage in computers? In shirts? ( D) Suppose now that each country specializes by devoting all of its workers to the industry in which it has a comparative advantage. In this case, what is world output of shirts and computers
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