The United States and Switzerland both produce automobiles and watches. The labor required to produce a unit of each product is shown in the following table:

a) Which country has an absolute advantage in the production of watches? In the production of automobiles?
b) Which country has a comparative advantage in the production of watches? In the production of automobiles?

Transcribed Image Text:

U.S. and Swiss Labor Requirements Automobiles (labor Watches (labor hours per unit) hours per unit) United States Switzerland 50 60 20