Comparative Advantage SI Review Question

Comparative Advantage SI Review Question - Comparative...

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Comparative Advantage Table Products Opportunity cost Cheese Orange Juice 1kg Cheese 1L Orange Juice Competitive Advantage Canada 10kg 100L 10L Orange Juice 1/10kg Cheese Cheese Hungary 5kg 60L 12L Orange Juice 1/12kg Cheese Orange Juice Lower Opp. Cost Country Canada (10<12) Hungary (1/12 < 1/10) What Country will Export and Import Canada will export Cheese and import Orange Juice Hungary will export Orange Juice and import Cheese Orange Juice Trade Canada will buy Orange Juice from Hungary at any “price” less than 1/10kg of Cheese If the price is greater, Canada is better off sacrificing 1/10kg of Cheese for each L of Orange Juice it needs Hungary will sell Orange Juice to Canada at any “price” greater than 1/12kg of Cheese If the price is less, Hungary is better off sacrificing 1/12kg of Cheese for each L of Orange Juice it needs Cheese Trade Canada will sell 1kg of Cheese to Hungary at any “price” greater than 10L of Orange Juice If the price is less, Canada is better off sacrificing 1kg of Cheese for 10L of Orange Juice
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This note was uploaded on 12/18/2010 for the course ECONOMICS 120 taught by Professor Mesta during the Spring '10 term at Wilfred Laurier University .

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Comparative Advantage SI Review Question - Comparative...

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