Which country has absolute advantage in which product

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Reference no: EM133629754

Question

Refer to the information on production possibilities provided in the table below to answer the questions that follow. These are the maximum amounts that can be produced in a week. China Thailand Tractors 30 20 Motorcycles 300 300

1. Which country has an absolute advantage in which product? Explain your answer.

2. Which country has a comparative advantage in which product? Explain your answer.

3. If the two countries decide to trade, what will be the limits to the terms of trade (ie., what are the minimum and maximum number of motorcycles that will be traded for each tractor?

Reference no: EM133629754

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