Suppose that in France 40 labor hours are required to produce a liter of wine. In Italy, 30 labor hours are required to produce a liter of wine. These figures indicate that Italy has an absolute advantage in wine production. France has an absolute advantage in wine production . Italy has a comparative advantage in wine production. France has

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
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Problem 3SCQ: In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine....
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Suppose that in France 40 labor hours are required to produce a liter of wine. In Italy, 30 labor hours are required to produce a liter of wine. These figures indicate that

Italy has an absolute advantage in wine production.
France has an absolute advantage in wine production
. Italy has a comparative advantage in wine production.
France has a comparative advantage in wine production.

 

 
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