Table 2.9
-Refer to Table 2.9. This table shows the number of labour hours required to produce a motorcycle and a guitar in Ireland and Scotland.
a.Which country has an absolute advantage in the production of motorcycles?
b.Which country has an absolute advantage in the production of guitars?
c.What is Ireland's opportunity cost of producing one motorcycle?
d.What is Scotland's opportunity cost of producing one motorcycle?
e.What is Ireland's opportunity cost of producing one guitar?
f.What is Scotland's opportunity cost of producing one guitar?
g.If each country specialises in the production of the product in which it has a comparative advantage, who should produce motorcycles?
h.If each country specialises in the production of the product in which it has a comparative advantage, who should produce guitars?
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Definitions:
Correlation
A statistical measure that indicates the extent to which two or more variables fluctuate together.
Restaurant
A business that prepares and sells food and drinks to customers.
Tips
A small amount of money given to someone as a way of thanking them for their service or advice, or suggestions intended to provide guidance or advice.
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