The U.S. and Canada both produce hats and scarves. Suppose that the U.S. can produce 600 hats per week or 200 scarves pe

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

The U.S. and Canada both produce hats and scarves. Suppose that the U.S. can produce 600 hats per week or 200 scarves pe

Post by answerhappygod »

The U.S. and Canada both produce hats and scarves. Suppose that the U.S. can produce 600 hats per week or 200 scarves per week. Suppose that Canada can produce 120 hats per week or 300 scarves per week.
(a) Which country has the absolute advantage in the production of each good?
(b) Which country has the comparative advantage in the production of each good? How did you determine your answer?
(c) If the U.S. and Canada decide to trade, what commodity will the U.S. trade to Canada? Explain.
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply