Question: Given the following Classical - type table showing the number of days of labor input required to obtain one unit of output of each of
Given the following Classicaltype table showing the number of days of labor input required to obtain one unit of output of each of the two commodities in each of the two countries:
Labor Requirement Table for US and UK
tablebicycles,computersUnited States, days, daysUnited Kingdom, days, days
Select has a comparative advantage in computers.
Select has a comparative advantage in bicycles.
United States should export Select to United Kingdom, and import from United Kingdom.
US and UK trade goods at "exchange rate' of bicycle for computer in international trade.
benefits more from the international trade when the terms of trade is at bicycle computer.
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