Table 2-31
-Refer to Table 2-31. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland.
a. Which country has an absolute advantage in the production of cell phones?
b. Which country has an absolute advantage in the production of lumber?
c. What is Estonia's opportunity cost of producing one cell phone?
d. What is Finland's opportunity cost of producing one cell phone?
e. What is Estonia's opportunity cost of producing one board foot of lumber?
f. What is Finland's opportunity cost of producing one board foot of lumber?
g. If each country specializes in the production of the product in which it has a comparative advantage, who should produce cell phones?
h. If each country specializes in the production of the product in which it has a comparative advantage, who should produce lumber?
Definitions:
Rebuilt Ignition Systems
Ignition systems that have been taken apart, inspected, repaired, and reassembled to ensure they meet certain standards.
Assembly Line
A manufacturing process in which parts are added in sequence until the final assembly is produced.
Telephone Calls
Verbal communication between two or more parties over a telephone network.
Probability
A measure quantifying the likelihood that an event will occur, expressed as a number between 0 and 1, where 1 indicates certainty.
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