U.S. U.K

Wheat 12 6

Cloth 6 18

The table above shows United States and United Kingdom production of wheat (bushels per hour) and cloth (yards per hour).

(a)What is the U.S. opportunity cost of producing Wheat? Only accept typing answers

(b)What is the U.S. opportunity cost of producing Cloth? Only accept typing answers

(c)What is the U.K. opportunity cost of producing Wheat? Only accept typing answers

(d)What is the U.K. opportunity cost of producing cloth? Only accept typing answers

(e)Which country has an absolute advantage in the production of wheat? Which country has an absolute advantage in the production of cloth? Only accept typing answers

(f)Which country has a comparative advantage in the production of wheat? Which country has a comparative advantage in the production of cloth? Only accept typing answers

(g)What good does the U.S. buy from the U.K.? What is the highest price that the U.S. will pay for this good? What is the lowest price that the U.K. will accept for this good? Only accept typing answers

(h)What good does the U.K. buy from the U.S.? What is the highest price the U.K. will pay for this good? What is the lowest price that the U.S. will accept for this good. Only accept typing answers

(i)Suggest a price for wheat (in terms of cloth) or cloth (in terms of wheat) that will be acceptable to both the U.S. and the U.K. Only accept typing answers