A) For the UK, what is opportunity cost of cheese and wine? What about for the Rest of the World (again, cost of cheese and wine)?B) Which country has the comparative advantage in Cheese? Wine? Given this, how much of each good does the UK choose to produce(given their labor supply)? The table below shows the number of gallons of Wine and pounds of Cheese produced in the United Kingdom and the rest of theworld per labor hour (that is, their productivity). Assume that both the UK and the Rest of the World have 100 labor hours.ProductivityIn the United KingdomIn the Rest of the WorldWine gallons per labor hour0.251.00Cheese pounds per labor hour0.500.67

Opportunity cost is the benefit derived after not choosing the alternate option.

A) For the UK, what is opportunity cost of cheese and wine? What about for the Rest of the World (again, cost of cheese and wine)? B) Which country has the comparative advantage in Cheese? Wine? Given this, how much of each good does the UK choose to produce (given their labor supply)?

A) For the UK, what is opportunity cost of cheese and wine? What about for the Rest of the World (again, cost of cheese and wine)? B) Which country has the comparative advantage in Cheese? Wine? Given this, how much of each good does the UK choose to produce (given their labor supply)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A) For the UK, what is opportunity cost of cheese and wine? What about for the Rest of the World (again, cost of cheese and wine)?
B) Which country has the comparative advantage in Cheese? Wine? Given this, how much of each good does the UK choose to produce
(given their labor supply)?

The table below shows the number of gallons of Wine and pounds of Cheese produced in the United Kingdom and the rest of the
world per labor hour (that is, their productivity). Assume that both the UK and the Rest of the World have 100 labor hours.
Productivity
In the United Kingdom
In the Rest of the World
Wine gallons per labor hour
0.25
1.00
Cheese pounds per labor hour
0.50
0.67

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