Answer: 11/2 unit of textiles is the highest price country b is willing to pay to buy wheat from country a.
Explanation:
Which nation produces each good at a comparative advantage?
- Wheat production in Country A is unquestionably superior (200 > 100).
- Of course, Country B must pay a price for its lower productivity when compared to Country A, but that price is a lower domestic income per capita rather than a disadvantage.
- To respond to questions 1-6, please refer to the graph below. 200 bushels of wheat total PPC 100 of Country A Country B's 100 150 PPC size of the textiles (units) 50% of a textile unit 2/3 of a textile unit 1 textiles unit A textile unit and a half 2 fabrics Determine which nation has a comparative advantage in producing each good using the graph.
- Country A has a comparative advantage in producing more wheat than other countries.
To learn more about comparative advantage refer:
Module 4 Flashcards - Quizlet
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