Question: Given the labor requirements in the table below: Computers Wheat France 100 days 4 days Germany 60 days 3 days a. Calculate the autarky price

Given the labor requirements in the table below:

Computers Wheat

France 100 days 4 days

Germany 60 days 3 days

a. Calculate the autarky price ratios.

b. Which country has comparative advantage in computers? Why? Which country has comparative advantage in wheat? Why?

c. If the terms of trade is 1 computer : 22 wheat, how many days of labor does France save per unit of its import good by engaging in trade? How many days of labor does Germany save per unit of its import

good?

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