This preview shows page 1. Sign up to view the full content.
Unformatted text preview: assume that China and France each have 1000 production units. With one unit of production (a mix of land, labor, capital and technology), China can produce either 10 containers of toys or 7 cases of wine. France can produce either 2 cases of toys or 7 cases of wine. Thus, a production unit in China is five times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine. France allocates 200 production units to building toys and 800 production units to producing wine....
View Full Document
This note was uploaded on 07/27/2011 for the course ECON 101 taught by Professor Dr. during the Spring '11 term at Columbia Union.
- Spring '11
- Comparative Advantage