Consider the information below for Namibia and Malaysia.
Namibian labor: 16 baskets/day or 4 lamps/day
Malaysian labor 20 baskets/day or 8 lamps/day
-Free trade between these two countries will create winners and losers. For Namibia, the losers will be those associated with _____ production; for Malaysia the losers will be those associated with _____ production.

Question

Quizplus · Accepted Answer

Namibia has a comparative advantage in basket production (16 baskets vs. 4 lamps per day), while Malaysia has a comparative advantage in lamp production (8 lamps vs. 20 baskets per day). Therefore, Namibia will specialize in baskets, and Malaysia will specialize in lamps. Namibian lamp producers and Malaysian basket producers will lose out due to increased competition from imports.

Consider the Information Below for Namibia and Malaysia