Question
The countries of Guatemala and Belize have labor forces that produce wool and rice. Half of the labor force in both countries produces wool and
The countries of Guatemala and Belize have labor forces that produce wool and rice. Half of the labor force in both countries produces wool and the other half of the labor force produces rice. The table below summarizes the quantity of wool and rice produced before international trade existed
Assume each country decides to engage in international trade and to specialize in the industry (either wool production or rice production) that they are best at producing. The table below summarizes their area of specialization and the quantity produced.
Required:
a.)In which industry does each country have a comparative advantage? (2 marks)
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