American and Mexican workers can each produce 10 T-shirts per day. An American worker can produce 18 dozen brownies per day, while a Mexican worker can produce 10 dozen brownies per day. To simplify things, assume that each country has 1 million workers.

C. For the United States, what is the opportunity cost of a T-shirt? From a dozen brownies? For Mexico, what is the opportunity cost of a t-shirt? From a dozen brownies? Place this information in a table analogous to Table 2.

d. Which country has an absolute advantage in t-shirt production? In producing brownies?

my. Which country has a comparative advantage in t-shirt production? In producing brownies?

F. Without trade, half of the workers in each country produce t-shirts and half produce brownies. How many t-shirts and brownies does each country produce?

gram. Starting from a non-trade position, give an example in which trade improves the situation of each country.

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To answer the questions lets start by calculating the opportunity costs and determining the absolute ... View the full answer