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Suppose that the United States and Saudi Arabia can each produce two products, oil and personal computers. The labor requirements per unit of output are
Suppose that the United States and Saudi Arabia can each produce two products, oil and personal computers. The labor requirements per unit of output are provided in the table below:
Labor Requirements Per Unit of OutputUnited StatesSaudi ArabiaOil108Personal Computers304
Calculate the labor and opportunity costs for each good, and then compute each country's absolute and comparative advantage. Use the results to determine what good each country should export and explain your reasoning.
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