ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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home cheese alc=1hr/kg wine alw=2hrs/gallon
foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon
- Calculate the Home country's
opportunity cost of producing cheese. - In which product does the Home (Foreign* ) country has an
absolute advantage ? - Show in which product does the Home (Foreign* ) country has
comparative advantage ? - Calculate the relative supply (RS)
- With trade, what is the equilibrium range that the relative price of cheese to wine will settle?
- Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?
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