Question: Suppose that Slovenia and Wales both produce boots and shoes. Slovenia's opportunity cost of producing a pair of shoes is 4 pairs of boots while
Suppose that Slovenia and Wales both produce boots and shoes. Slovenia's opportunity cost of producing a pair of shoes is 4 pairs of boots while Wales's opportunity cost of producing a pair of shoes is 11 pairs of boots. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the production of shoes and has a comparative advantage in the production of boots.
Step by Step Solution
3.41 Rating (148 Votes )
There are 3 Steps involved in it
Slovenia has a comparative advantage in the production of shoes because its opportunity cost of prod... View full answer
Get step-by-step solutions from verified subject matter experts
