Answer the following questions using the information given by the accompanying table:
|
Home Country |
Foreign Country |
Absolute Advantage |
|
Number of bicycles
produced per hour
|
4 |
2 |
? |
|
Number of snowboards
produced per hour
|
6 |
8 |
? |
| Comparative advantage |
? |
? |
|
a. Complete the table for this problem
b. Which country has an absolute advantage in the production of bicycles? Which country has an absolute advantage in the production of snowboards?
c. What is the opportunity cost of bicycles in terms of snowboards at Home? What is the opportunity cost of bicycles in terms of snowboards in Foreign?
d. What product will Home export, and which product does Foreign export? Briefly explain why.