Comparative Advantage Practice Problems – Remember to have the comparative advantage you must have the LOWEST OPPORTUNITY COST!
Ricky
Tire Changes (per hour) 5
Oil Changes (per hour) 3
Bobby
4
2
Who should do tire changes? Who should do oil changes?
U.S.
Trains (per day) 4
Planes (per day) 2
Canada
3
1
Who should produce trains? Who should produce planes?
U.S.
Wheat (bushels) 40
Corn (bushels) 40
Russia
30
10
Who should produce wheat? Who should produce corn?
Norway
Grapes (bushels) 1
Lumber (loads) 12
Italy
10
1
Who should produce grapes? Who should produce lumber?
Chip
Walnuts 5
Pecans 5
Dale
2
2
What is different about this situation? What does this tell us about the potential for trade between Chip & Dale?