Look at Exercise 33.2. Compute the opportunity costs of producing sweaters and wine in both France and Tunisia. Who has the lowest opportunity cost of producing sweaters and who has the lowest opportunity cost of producing wine? Explain what it means to have a lower opportunity cost.

Exercise 33.2

Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of  beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in  producing autos? What is the opportunity cost of producing one pound of beef in Brazil? What is the opportunity cost  of producing one pound of beef in the United States?