Table 9-9 Output Per Hour of Work

question 304

Essay

Table 9-9
Output Per Hour of Work
Table 9-9 shows the output per hour of work for light bulbs and flash drives in Mexico and in Canada.
-Refer to Table 9-9.
a. Which country has an absolute advantage in the production of both light bulbs and flash drives?
b. Which country has a comparative advantage in the production of light bulbs?
c. Which country has a comparative advantage in the production of flash drives?

---

Definitions:

Private Value

The value of a good or service to an individual rather than to society as a whole or to the market.

Externality

A cost or benefit arising from an activity or transaction that affects an unrelated third party who did not choose to incur that cost or benefit.

Command-And-Control Policies

Governmental regulations that directly mandate specific practices or limit activities in order to achieve policy outcomes, such as environmental standards.

Market-Based Policies

Economic strategies that utilize market principles and forces to address and solve problems, often with the goal of improving efficiency and outcomes.