Table 2.13 -Refer to Table 2.13.This Table Shows the Number of Labour

question 40

Essay

Table 2.13
-Refer to Table 2.13.This table shows the number of labour hours required to produce a cell phone and a cubic metre 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 cubic metre of lumber?
f. What is Finland's opportunity cost of producing one cubic metre 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?

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Definitions:

Low Saving

A condition characterized by individuals or populations saving a minimal portion of their income, potentially impacting investment and economic growth.

Low Investment

A scenario characterized by minimal input of capital or resources towards business growth, expansion, or development activities.

Low Productivity

A situation where there is an inefficient use of resources, resulting in less output per unit of input, often affecting economic growth and competitiveness.

Adequate Infrastructure

Essential facilities and systems serving a country, city, or area, including transportation and communication systems, power plants, and schools, that are sufficient to support economic activities and improve quality of life.