Question

Suppose that auto workers in South Korea can pro-duce components used to make cars at the rate of six sets of components per worker per day and can assemble cars at the rate of four cars per worker per day. In North Korea auto workers can produce components at the rate of one set of components per day and can assemble cars at the rate of three cars per worker per day. What is the opportunity cost of car assembly in terms of component production in each country? If one economy exports components and the other exports assembled cars, which economy will export cars according to the theory of comparative advantage?



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  • CreatedNovember 13, 2014
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