Countries have comparative advantages in which goods

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A Spanish can either produce 3 liters of win or 1 kilos of cheese. A Portuguese worker can either produce 4 litres of win or 12 kilos of cheese 1) Which countries have absolute advantages in which goods? Explain 2) Which countries have comparative advantages in which goods? Explain 3) Can the two countries gain from trade? If so then explain at what set of relative prices both countries gain from trade 4) Use an example to show how both countries can increase their consumption of both goods by trading with one another

Reference no: EM13862642

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