Refer to Table 2-25. This table shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland
a. Which country has an absolute advantage in the production of motorcycles?
b. Which country has an absolute advantage in the production of guitars?
c. What is Ireland's opportunity cost of producing one motorcycle?
d. What is Scotland's opportunity cost of producing one motorcycle?
e. What is Ireland's opportunity cost of producing one guitar?
f. What is Scotland's opportunity cost of producing one guitar?
g. If each country specializes in the production of the product in which it has a comparative advantage, which country should produce motorcycles?
h. If each country specializes in the production of the product in which it has a comparative advantage, which country should produce guitars?
a. Scotland has an absolute advantage in the production of motorcycles.
b. Scotland has an absolute advantage in the production of guitars.
c. Ireland's opportunity cost of producing one motorcycle is 4 guitars.
d. Scotland's opportunity cost of producing one motorcycle is 4.5 guitars
e. Ireland's opportunity cost of one guitar is 0.25 motorcycles.
f. Scotland's opportunity cost of one guitar is 0.22 motorcycles.
g. Ireland should specialize in producing motorcycles.
h. Scotland should specialize in producing guitars.
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