Question

uppose that the United States and Canada can each produce two products: lumber and beef. Create a table like the one below, showing labor requirements per unit of output for each country. (Hint: Choose numbers for each country that are easily divisible by one another.)

Labor Requirements per Unit of Output

United States Canada

Lumber 8tons 16tons '

Beef 10tons 5tons

What does absolute advantage mean? How do you calculate absolute advantage? In what output(s) does the U.S. have an absolute advantage? Explain using the data from your table. In what output(s) does Canada have an absolute advantage? Explain using the data from your table. What product should each country export? Why?What does comparative advantage mean? How do you calculate comparative advantage? In what output(s) does the U.S. have a comparative advantage? Explain using the data from your table. In what output(s) does Canada have a comparative advantage? Explain using the data from your table.

Answer 1

CLASSTIME Pg. No. Date labor Res" Canada U.S. 8 lumber 5 Bef more pro v.s. has an Absolute advantage means a country is ductive in any goodt of it is compared to foreign country. absolute advantage lumber and Canada has an abs. advantage in beef us will export lumber and import Beef. Canada will export Beef and import Cumbele comparative advantage means county Advantage in a good in which it was more Abs. Advan tage or lower absolute disa U.S. has CA 4 Anada has has coup advantage. Thus n Cember A in Belf.