The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5

-Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?

Question

The table given below represents butter and ham production by two countries Norway and Sweden.Table 2.5
 
-Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?

Quizplus · Accepted Answer

To determine which country has the comparative advantage in food production, we need to compare the opportunity cost of producing food between the two countries. The opportunity cost for the United States to produce 1 unit of food is 5/20 = 1/4 unit of computers, while the opportunity cost for Japan to produce 1 unit of food is 30/10 = 3 units of computers. Therefore, the United States has a lower opportunity cost for producing food and has the comparative advantage in food production.

The Table Given Below Represents Butter and Ham Production by Two