Which country had an absolute advantage in the production of Machines? Calculate and explain which country has a comparative advantage in the production of Machines and Cloth. The table below gives the number of labour needed to produce one unit of Cloth and Machinein Lesotho and Swaziland.Table 1: Units of labour needed for the production of one unit.Lesotho2550ClothMachineSwaziland615

Absolute advantage refers to the the ability of the country to produce more output than the other…

Answered: The table below gives the number of…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter26: Factor Markets: With Emphasis On The Labor Market

Section26.2: The Labor Market

Problem 4ST

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Which country had an absolute advantage in the production of Machines?

Calculate and explain which country has a comparative advantage in the production of Machines and Cloth.

The table below gives the number of labour needed to produce one unit of Cloth and Machine
in Lesotho and Swaziland.
Table 1: Units of labour needed for the production of one unit.
Lesotho
25
50
Cloth
Machine
Swaziland
6
15

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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3. From the Calculations above in answer 2, which product should each country specialise in its production to achieve gains from international trade?

4. From the answers in 2 and 3 above, Outline the range for the terms of trade.

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