a. Which country has the absolute advantage in wheat? In
corn? Explain.
b. What is the opportunity cost of producing an extra bushel
of wheat in Brazil? In Mexico? Which country has the
comparative advantage in wheat production? Explain.
c. Which country has the comparative advantage in corn
production? Explain.
d. Explain why one country can have an absolute advantage
in both goods but cannot have a comparative advantage
in both goods.
e. On a single scale diagram with wheat on the horizontal
axis and corn on the vertical axis, draw each country’s
production possibilities boundary.
f. What is shown by the slope of each country’s production
possibilities boundary? Be as precise as possible.
12. The following table shows how many tonnes of dairy products
and beef products can be produced in New Zealand and Australia
with one unit of equivalent resources.
rishikesh
(rishikesh)
#1