Question
Suppose you work for a multinational company in the country of Andoria, and there has been an announcement that the neighboring country of Bajor is
Suppose you work for a multinational company in the country of Andoria, and there has been an announcement that the neighboring country of Bajor is interested in importing dilithium crystals and as such plan to sell it to the Bajorans when it is produced.
Your company has engaged the services of a corporation named Quark Enterprises, which specializes in training people to produce Dilithium Crystals. Quark enterprises has offered them the following packages as well as the corresponding impact on productivity for each package
Package 1: Skill level 1 training: each person hired can produce 3 dilithium crystals per hour
Package 2: Skill level 2 Training: each person hired can produce 5 dilithium crystals per hour
Package 3: Skill level 3 training: each person hired can produce 6 dilithium crystals per hour
Package 4: Skill level 4 Training: each person hired can produce 10 dilithium crystals per hour
Package 5: Skill level 5 training: each person hired can produce 15 dilithium crystals per hour
Your company has chosen to go with package 1 (as it was the cheapest and each subsequent package is more expensive than what came before. This means that package 5 is the most expensive).
After this deal has been signed, your company on Andoria finds out that another company on another neighboring country of Cardassia, has also started producing this good with the intent to sell it to the Bajorans and Bajor has made it clear that they would only be choosing one country with which to trade (the one that offers the cheapest price).
All countries produce a second good, gel packs that neither of them is interested in trading (Think of it that each country produces it just the way they like it and as such, need not buy it from anywhere else)
The following is public knowledge as well
- On Andoria, each person hired can produce 30 gel packs per hour (for Andorian productivity of dilithium crystals, see package 1 training outcome)
- On Bajor, each person hired can produce 10 gel packs per hour
- On Bajor, each person hired can produce 1 dilithium crystal per hour
- On Cardassia, each person hired can produce 40 gel packs per hour
- On Cardassia, each person hired can produce 8 units of dilithium per hour
Which country do you predict Bajor import (buy) Dilithium crystals from and why?
Bajor will buy from Andoria since they have the better technology and can produce more goods
Andoria because they have the smallest opportunity cost
Bajor will buy from Andoria since they have the worst technology and can produce less goods
Cardassia because they have the smallest opportunity cost
Bajor will not trade with either country because neither has comparative advantage over Bajor
Bajor will buy from Cardassia since they have the worst technology and can produce less goods
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