Assume that an english worker can produce

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Reference no: EM1320561

Q. England also Scotland both produce whisky also sweaters. Assume that an English worker can produce 50 bottles whisky every hour or 1 sweater every hour. Assume that a Scottish worker can produce 40 bottles whisky every hour or 2 sweaters every hour.

a. Illustrate what country has the absolute advantage in the production of each good? Which country has the comparative advantage?

b. If England also Scotland decides to trade, which commodity will Scotland trade to England? Elucidate how your work also explains.

c. If a Scottish worker could produce only 1 sweater every hour, will Scotland still gain from trade? Will England still gain from trade? Explain

Reference no: EM1320561

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