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Suppose in the Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In

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Suppose in the Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In

Suppose in the Germany, the opportunity cost of producing a gallon of beer is 5 gallons of wine. In Italy, the opportunity cost of producing a gallon of beer is 3 gallons of wine.
a.    What is the opportunity cost of producing a gallon of wine for Germany?
b.    What is the opportunity cost of producing a gallon of wine for Italy?
c.    Which country has a comparative advantage in the production of beer?
d.    Which country has a comparative advantage in the production of wine?

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Essentials of Economics

Edition: 4^th

Authors: Hubbard, O'Brien

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