A. The accompanying table gives how many skis and sleds can be produced in Denmark and Iceland using one day’s worth of labor.
Country | Skis | Sleds |
Denmark | 4 | 12 |
Iceland | 3 | 6 |
Using the data from the table, has the absolute advantage in producing skis and has the absolute advantage in producing sleds.
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B. Use the figures in the table above to fill out the table below. (Round your answers to two decimal places as needed.)
Denmark opportunity cost | Iceland opportunity cost | Country with comparative advantage | |
Skis | sleds | sleds | |
Sleds | skis | skis |
C. In order for gains from trade to be possible…
A. |
B. |
C. |
D. |
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