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Suppose that there are two countries, Upland and Downland. Within each of the two countries, all workers are identical, but workers in Upland are not
Suppose that there are two countries, Upland and Downland. Within each of the two countries, all workers are identical, but workers in Upland are not identical to workers in Downland. In Upland, a worker can produce 10 tons of wheat in a year of work (assume a year of work is the same amount of time in both countries) or 4 cars in a year of work. In Downland, a worker can produce 15 tons of wheat in a year of work or 8 cars in a year of work. Assume for simplicity that each country has ten workers. a.Which country has an absolute advantage in producing cars? In producing grain? b.Which country has a comparative advantage in producing cars? In producing grain? Explain your reasoning
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