Which country has an absolute advantage in which product


Now assume that a country A takes 100 hours to produce 20 aircraft or 10 jet engines and country B takes 100 hour to produce 15 aircraft or 5 jet engines.

  • Which country has an absolute advantage in which product?
  • Does either country have a comparative advantage in one of the product ?
  • Can trade takes place between the two countries ?
  • What would be the limit of the terms of trade if it were to take place ?

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Business Economics: Which country has an absolute advantage in which product
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