Table 18-6
Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Which country has a comparative advantage in producing hats?

Question

Table 18-6
Production and
Consumption Production
Without Trade With Trade
  Denmark and Belize can produce both clocks and hats. Table 18-6 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 18-6.Which country has a comparative advantage in producing hats?

Quizplus · Accepted Answer

Belize has a lower opportunity cost for producing hats compared to Denmark. It only needs to give up 0.5 clocks to produce 1 hat, while Denmark has to give up 1 clock to produce the same hat. Therefore, Belize has a comparative advantage in producing hats.

Table 18-6 Production and