I need help on my economics practice question

Question

_________l__ lzodia ____I___oz___I

Product____IworkersI outputI wokersI outputI

Television____50__I__75__I__50__I_100

Computers___50__I__150_I__50__I__25

a) Which country has an absolute advantage in producing televisions? Computers?

b) Which country has a comparative advantage in producing televisions? Computers?

Answer 1

Izodia has absolute advantage and comparative in computers and Oz in televisions.

Izodia makes 2 computers for every 1 tv

OZ makes 4 tvs for every 1 computer

Answer 2

A)

Oz has absolute advantage in producing TVs

Izodia has absolute advantage in producing PCs

B)

Oz has comparative advantage in producing TVs (it costs only 0.25 PCs to produce one TV, while in Izodia it costs 2 PC)

Izodia has comparative advantage in producing PCs (it costs only 2 TVs to produce one PC, while in Oz it costs 4 TVs).

Initial data:

..........I....O....

.TV...75..100..

.PC..150..25...

Absolute advantage matrix:

...........I....O....

.TV.........100..

.PC..150.........

Absolute disadvantage matrix:

...........I....O....

.TV....75.........

.PC..........25...

Comparative advantage calculation:

...........I.......O....

.TV...0.5....4.0....  .. (75/150=0.5) ... (100/25=4)

.PC..2.0...0.25....  .. (150/75=2) ...(25/100=0.25)

Comparative advantage matrix:

..........I.....O.....

.TV..........4.0....   <- it is relatively cheaper to produce TVs in Oz

.PC...2.0...........  <- it is relatively cheaper to produce PCs in Izodia

Comparative disadvantage matrix:

..........I.......O.....

.TV..0.5............   <- it is relatively expensive to produce TVs in Izodia

.PC..........0.25..   <- it is relatively expensive to produce PCs in Oz

Answer 3

Absolute advantage: Izodia has in Computers, and oz has in Television.

thats all i can say, is it right ?