Labor Hours Required to Produce One Unit: Wine Coffee

J. SOLVE ECO PROBLEMS
Name
Institution
Date
Question 1
Labor Hours Required to Produce One Unit
Wine Coffee
Argentina 4 hrs. 8 hrs.
Columbia 8 hrs. 12 hrs.
Which country has an absolute advantage in wine production?
Argentina has lower labor costs in wine production
Which country has an absolute advantage in coffee production?
Argentina also has lower labor requirements in coffee production
What is the opportunity cost of wine in Argentina?
4hrs/8r= 0.5
What is the opportunity cost of wine in Columbia?
8 hrs/ 12 hrs= 0.67
What is the opportunity cost of coffee in Argentina?
8 hrs/ 4 hrs= 2
What is the opportunity cost of coffee in Columbia?
12 hrs/ 8 hrs= 1.5
Which country has a comparative advantage in wine?
Argentina has comparative advantage in wine, as comparative advantage represents opportunity costs.
Which country has a comparative advantage in coffee?
Colombia has comparative advantage in coffee
Which country will export wine?
Argentina
Which country will export coffee?
Colombia
Labor Minutes Required to Produce One Unit
Germany Poland
Meat 30 min. 80 min.
Potatoes 10 min. 60 min.
W...