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The following table shows the amount of good A and good B that two countries could produce if
they devoted all their resources to that good. Assume both countries have the same amount of
resources and the trade-off between good A and good B remains constant as resources are
shifted from one good to another. (30 points)
Canada
India
Good A
400
300
Good B
950
500
Which country has the absolute advantage in good A? In good B?
What is Canadas marginal opportunity cost of producing good A? good B?
What is Indias marginal opportunity cost of producing good A? good B?
Which country has the comparative advantage in good A? In good B?
Based on the data given, what is the terms of trade range for good A in terms of units of good B?
Canada India
Good A 400 300
Good B 950 500

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The following table shows the amount of good A and good B th.pdf

  • 1. The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same amount of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. (30 points) Canada India Good A 400 300 Good B 950 500 Which country has the absolute advantage in good A? In good B? What is Canadas marginal opportunity cost of producing good A? good B? What is Indias marginal opportunity cost of producing good A? good B? Which country has the comparative advantage in good A? In good B? Based on the data given, what is the terms of trade range for good A in terms of units of good B? Canada India Good A 400 300 Good B 950 500