Table 2.12 Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland.
-Refer to Table 2.12.If the two countries specialize and trade, who should export lumber?
A)There is no basis for trade between the two countries.
B)Estonia
C)Finland
D)They should both be exporting lumber.

Question

Table 2.12  Table 2.12 shows the number of labour hours required to produce a cell phone and a cubic metre of lumber in Estonia and Finland.
-Refer to Table 2.12.If the two countries specialize and trade, who should export lumber?
A)There is no basis for trade between the two countries. 
B)Estonia 
C)Finland 
D)They should both be exporting lumber.

Quizplus · Accepted Answer

Estonia should export lumber if the two countries specialize and trade, assuming Estonia has a comparative advantage in producing lumber, which is typically determined by having a lower opportunity cost for producing lumber compared to Finland. Comparative advantage drives trade decisions in international economics.

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