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Consider the Ricardian model of trade. There are two goods, smartphones and cars, and they are produced with labour. The production process features constant
Consider the Ricardian model of trade. There are two goods, smartphones and cars, and they are produced with labour. The production process features constant marginal product of labour in the production of each good. In Belgium, it takes 20 hours of work to produce a car and 5 hours of work to produce a smartphone. 1. What is the marginal product of an hour of work in Belgium for car production? What is the marginal product of labour in smartphone production? (7 Marks) 2. What is the opportunity cost of producing a car in Belgium? (7 Marks)
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Understanding Basic Statistics
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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