Question
Suppose that country A has 240 workers, where production of good X requires 3 workers and production of good Y requires 4 workers. In
Suppose that country A has 240 workers, where production of good X requires 3 workers and production of good Y requires 4 workers. In contrast, country B has 450 workers, where the unit labour requirements for X and Y are 5 and 9, respectively. a. Plot the two countries' production possibility frontiers. b. Which country has the absolute advantage in production? C. What are the relative prices of the goods in autarky in each country? d. Which country exports which good?
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International Trade
Authors: John McLaren
1st edition
0470408790, 978-0470408797
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