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Social ScienceAssume output was initially 100 wheat and 25 TV's in Country A and 40wheat and 40 TV's in Country B. If both countries specialize according tocomparative advantage, their combined production of wheat changes from140 toand their combinedproduction of TV's changes from 65 tobased on the graphs below.WheatCountry AWheatCountry B20080Television Sets80Television Sets50280; 130200; 8080; 50200; 50
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Assume output was initially 100 wheat and 25 TV's in Country A and 40 wheat and 40 TV's in Country B. If both countries specialize according to comparative advantage, their combined production of wheat changes from 140 to and their combined production of TV's changes from 65 to based on the graphs below. Wheat Country A Wheat Country B 200 80 Television Sets 80 Television Sets 50 280; 130 200; 80 80; 50 200; 50
Expert Answer
The production frontier of the two countries are given in the figure in which the graph is steeper for the country A whereas the production frontier for country B is flatter. When the production frontier of a country is steeper, it means that the country has a comparative advantage in the production of the good which is indicated on the Y axis whereas the flatter production frontier indicates comparative advantage for the good on the X axis.
As per the law, the country A will have comparative advantage in the production of the Wheat since it has a steeper production ...
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