Suppose that the productivity per worker in the milk and cranberry juice industries of Southland and Northland are as follows: $\begin{array}{c}
\underline{\text { Output in Thousands of Litres }}\
\begin{array}{lll}
\
\
\text {Northland}\
\text {Southland}
\end{array}
\begin{array}{c}
\
\underline{\text { Milk }} \
6\
2
\end{array}
\begin{array}{lll}
\
\
\text { or }\
\text { or }
\end{array}
\begin{array}{c}
\
\underline{\text { Cranberry Juice}}\
3\
1
\end{array}
\end{array}$

a) Which country has the absolute advantage in producing milk?
b) Which country has the absolute advantage in producing cranberry juice?
c) Which country has the comparative advantage in producing milk?
d) Which country has the comparative advantage in producing cranberry juice?
e) According to the theory of comparative advantage, will there be trade? If yes, what is the direction of trade?

Question

Suppose that the productivity per worker in the milk and cranberry juice industries of Southland and Northland are as follows: $\begin{array}{c}
\underline{\text { Output in Thousands of Litres }}\
\begin{array}{lll}
\
\
\text {Northland}\
\text {Southland} 
\end{array}
\begin{array}{c}
\
\underline{\text { Milk }} \
6\
2
\end{array}
\begin{array}{lll}
\
\
\text { or }\
\text { or } 
\end{array}
\begin{array}{c}
\
\underline{\text { Cranberry Juice}}\
3\
1
\end{array}
\end{array}$

a) Which country has the absolute advantage in producing milk?
b) Which country has the absolute advantage in producing cranberry juice?
c) Which country has the comparative advantage in producing milk?
d) Which country has the comparative advantage in producing cranberry juice?
e) According to the theory of comparative advantage, will there be trade? If yes, what is the direction of trade?

Quizplus · Accepted Answer

The Answer of Suppose that the productivity per worker in the milk and cranberry juice industries of Southland and Northland are as follows: $\begin{array}{c}
\underline{\text { Output in Thousands of Litres }}\
\begin{array}{lll}
\
\
\text {Northland}\
\text {Southland} 
\end{array}
\begin{array}{c}
\
\underline{\text { Milk }} \
6\
2
\end{array}
\begin{array}{lll}
\
\
\text { or }\
\text { or } 
\end{array}
\begin{array}{c}
\
\underline{\text { Cranberry Juice}}\
3\
1
\end{array}
\end{array}$

a) Which country has the absolute advantage in producing milk?
b) Which country has the absolute advantage in producing cranberry juice?
c) Which country has the comparative advantage in producing milk?
d) Which country has the comparative advantage in producing cranberry juice?
e) According to the theory of comparative advantage, will there be trade? If yes, what is the direction of trade?

Suppose That the Productivity Per Worker in the Milk and Cranberry