Discuss the pattern of absolute advantages across the two countries.
2: (10 points) Now consider the following (I increase foreign productivity in manu): MANUFACTURE PRODUCTIVITY (output per worker) AGRICULTURE PRODUCTIVITY (output per worker) LABOUR ENDOWMENT HOME 20 10 100 FOREIGN 25 5 100 a) Show how Foreign’s PPF has changed. b) Identify each country’s opportunity costs in each sector. Interpret. c) Who has the […]
