Given the Input-Output Relationships in the Table Below (A) Which Country Has Absolute Advantage in Which Good and  

question 15

Essay

Given the input-output relationships in the table below:
$\begin{array}{} &     Countries \\& \text { A } & \text { B } \\\text { Goods } & & \\\text { X } & 8 & 4 \\\text { Y } & 4 & 1\end{array}$
(a) Which country has absolute advantage in which good and why?
(b) Which country has comparative advantage in which good and why?
(c) If A is endowed with 8000 hours of labor,how much X will it produce after trade begins? How much Y? Explain.
(d) What is the allowable range on A's wages relative to B's if trade is flowing between these two countries according to comparative advantage?

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Definitions:

Verbal Memories

The memory of words and other abstract symbols, including the ability to recall and recognize language-based material.

Hypothalamus

A region of the brain below the thalamus, coordinating both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems, and involved in sleep and emotional activity.

Context-dependent Memory

Information that is better retrieved in the context in which it was encoded and stored, or learned.