Absolute and comparative question, Pls help!?

Question

5. The table shows the number of labour hours required to produce one unit of wheat and cloth for both England and USA respectively.

England USA

Wheat 3 2

Cloth 6 5

(a) Which country has an absolute advantage in producing wheat? In producing cloth?

(b) Calculate and fill in the opportunity costs of producing wheat and cloth for both countries.

(c) Which country has a comparative advantage in producing wheat? In producing cloth?

(d) Which country should specialize in producing wheat? In producing cloth?

(e) For a period of 240 labour hours, how many units of both wheat and cloth can be produced if both countries specialize according to (d)?

THanks

Answer 1

a.  US has absolute advantage in both Wheat & Cloth

b.  England oppurtunity cost   1W = 2 Cloth or 0.5W = 1Cloth

     US oppurtunity cost  1W = 2.5 Cloth   or  0.1W = 1Cloth

c. England has comperattive advantage in Wheat and US has in Cloth.

d.  England will specialize in Wheat and US will specialize in Cloth.

e. Wheat 80  & Cloth 48