Consider the following Table 1 which represents unit labour requirements for the production of commodity X and Y by country A and B, and answer the questions that follow: 10 Table 1: Unit labour requirement for production of Good X and Y by Country A and B Commodity X Commodity Y Country A 9 40
Answer (1)
1st Jul, 2021
The question is a bit incomplete but to give you a general idea of the topic usually a country has absolute advantage in producing commodity x and y when-
1)produces greater quantity for the same cost or,
2) same quantity at lower cost than the other country.
In comparative advantage the country whose production is based on lower opportunity cost is more better.
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Related Questions
Question : India produces two commodities: X and Y. Its production possibilities are shown in the following table:
| Possibility | A | B | C | D | E | F |
| Commodity X | 20 | 14 | 9 | 5 | 2 | 0 |
| Commodity Y | 0 | 1 | 2 | 3 | 4 | 5 |
Calculate MRT for the possibility C.
Option 1: 5:1
Option 2: 4:1
Option 3: 6:1
Option 4: 2:1
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