Canada requires 4 worker hours to build a surfboard, while Australia only takes 2 hours. However, Canada can assemble a skateboard in 1 worker hour, while Australia takes 8 worker hours. Image transcription text Surfboard Skateboard (worker hours to build one) (worker hours to build one) Canada 4 Australia 2
a) Which country has an absolute advantage in skateboards?
b) Use the table to calculate the opportunity costs for each good and each country. Which country has a lower opportunity cost for building surfboards?
c) In which good would Australia specialize, and what range of terms of trade would be acceptable?
d) Assume there are 8 hours of production time available. Draw a PPC for each country, placing surfboards on the y-axis and skateboards on the x-axis.
e) Australia asks Canada for 4 surfboards in exchange for 1 skateboard. Is Canada likely to accept this trade offer? Explain.
