Opputunity Cost: Labor Hours Required To Produce One Unit

Example A:
Labor Hours Required to Produce One Unit
WineCoffee
Bolivia6 hrs. 12 hrs.
Chile3 hrs. 15 hrs.
1 Which country has an absolute advantage in wine?
Chile
2 Which country has an absolute advantage in coffee?
Bolivia
3 What is the opportunity cost of wine in Bolivia?
Number of labor hours in Bolivia = 6
Number of labor hours in Chile = 3
Chosen option is Bolivia
Opportunity cost of producing wine in Bolivia = 3 hours / 6 hours
Opportunity cost = 1/2 hour.
This means that for every hour spent producing wine in Bolivia, a half-hour is sacrificed.
4 What is the opportunity cost of wine in Chile?
Number of labor hours in Bolivia = 6
Number of labor hours in Chile = 3
Chosen option is Chile
Opportunity cost of producing wine in Chile = 6 hours / 3 hours
Opportunity cost = 2 hours.
This means that for every hour spent in Chile, 2 hours are spent in Bolivia or are saved.
5 What is the opportunity cost of coffee in Bolivia?
Number of labor hours in Bolivia = 12
Number of labor hours in Chile = 15
Chosen option is Bolivia
Opportunity cost of producing coffee in Bolivia = 15 hours / 12 hours
Opportunity cost = 1 ¼ hours.
This means that for every hour spent producing coffee in Bolivia, 1 ¼ hours are spent in Chile.
6 What is the opportunity cost of coffee in Chile?
Number of labor hours in Bolivia = 12
Number of labor hours in Chile = 15
Chosen option is Chile
Opportunity cost of producing coffee in Chile = 12 hours / 15 hours
Opportunity cost = 4/5 hour.
This means that for every hour spent producing coffee in Chile, 4/5 hour is spent producing coffee in Bolivia.
7 Which country has a comparative advantage in wine?
Chile
8 Which country has a comparative advantage in coffee?
Bolivia
9 Which country will import wine?
Bolivia
10 Which country will export coffee?
Bolivia
Example B:
Labor Minutes Required to Produ...