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Unformatted text preview: wo nations when 1 caviar is exchanged for (1/3/5) tons of wheat. We are once again turning inputs into outputs. In 6 hours, the U.S.A. can produce an output of 1 caviar or 2 wheats.
In 16 hours, Russia can produce an output of 1 caviar or 4 wheats. [Outputs v. Inputs]
Remember that with outputs or quantity, the larger number indicates absolute advantage; that country can produce “absolutely more” with the same inputs, and is more efficient. Product
And with inputs (hours), the smaller number indicates absolute advantage; that country is more efficient because it can produce a good “absolutely faster” the same output. Resource
Market 2nd Most Missed Question On 95 AP Exam [26% correct] Country
Clothing Ducky 20 hours 50 hours Wucky 10 hours
20 hours Wucky
a. Ducky has a comparative advantage in the production of both food and clothing. b. Wucky has a comparative advantage in the production of both food and clothing.
c. Ducky has a comparative advantage in food production, & Wucky has a comparative advantage in clothing production...
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This note was uploaded on 07/20/2012 for the course ECON 2106 at GCSU.