Poland requires 4 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. The Czech Republic requires 6 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of wheat. Suppose that Poland has 1,000 hours of labor and that it completely specializes according to its comparative advantage. How many units of which product will it produce?
A) 250 tons of coal
B) 1,000 bushels of wheat
C) 100 bushels of wheat
D) 4,000 tons of coal

Question

Quizplus · Accepted Answer

Poland has a comparative advantage in producing coal, so it will completely specialize in producing coal. With 1,000 hours of labor, Poland can produce 1,000/4 = 250 tons of coal.

Poland Requires 4 Hours of Labor to Produce 1 Ton