Refer to Table 2-21. This table shows the number of labor hours required to produce a digital camera and a bushel of wheat in China and South Korea
a. Which country has an absolute advantage in the production of digital cameras?
b. Which country has an absolute advantage in the production of wheat?
c. What is China's opportunity cost of producing one digital camera?
d. What is South Korea's opportunity cost of producing one digital camera?
e. What is China's opportunity cost of producing one bushel of wheat?
f. What is South Korea's opportunity cost of producing one pound of wheat?
g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce digital cameras?
h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce wheat?
a. South Korea has an absolute advantage in the production of digital cameras.
b. South Korea has an absolute advantage in wheat production.
c. China's opportunity cost of producing one digital camera is 20 bushels of wheat.
d. South Korea's opportunity cost of producing one digital camera is 30 bushels of wheat
e. China's opportunity cost of one bushel of wheat is 0.05 units of a digital camera.
f. South Korea's opportunity cost of one bushel of wheat is 0.03 units of a digital camera.
g. China should specialize in producing digital cameras.
h. South Korea should specialize in producing wheat.
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