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Consider the Following Production Data for Two Countries,England and Portugal

Question 84

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Consider the following production data for two countries,England and Portugal: Consider the following production data for two countries,England and Portugal:    (a)Which country has an absolute advantage in the production of each good? Which country has a comparative advantage in the production of each good? (b)Assuming each country spends half their income on cheese and half on wine,and wine is the numéraire good,with no trade,autarky,what is the wage and price of cheese in each country? What is the total production of wine and cheese in each country? (c)After trade,what is the total production of each good?
(a)Which country has an absolute advantage in the production of each good? Which country has a comparative advantage in the production of each good?
(b)Assuming each country spends half their income on cheese and half on wine,and wine is the numéraire good,with no trade,autarky,what is the wage and price of cheese in each country? What is the total production of wine and cheese in each country?
(c)After trade,what is the total production of each good?

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(a)England/Portugal has a comparative ad...

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