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Table shows the bushels of corn and the bottles of wine that Japan and Korea can produce from one day of labor under four different hypothetical situations. For each case, identify the commodity in which Japan and Korea have an absolute advantage.
a. From Table, indicate for each case the commodity in which each country has a comparative advantage.b. From Table indicate for each case whether or not trade is possible and the basis fur trade.
c. Suppose chat in Case II, 2.11, Japan exchanges 4 bushels of corn for 4 bot-tles of wine with Korea.
1. How much does Japan gain?
2, How much does Korea gain?
3. What is the range for the terms of trade for mutually bene-ficial trade?
4. How much would each country gain if they exchanged 7 4 bushels of corn for 6 bottles of wine?
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