How many units of output of sippy cups and binkys

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Reference no: EM13159138

In Narnia, 1 binky can be produced with 2 workers and 1 sippy cup can be produced with 0.25 workers. In Bedrock, 1 binky can be produced with 1 worker and 1 sippy cup can be produced with 0.50 workers.

a. What is the opportunity cost of producing 1 sippy cup in Narnia and in Bedrock?

b. Which country has the comparative advantage in sippy cups?

c. Suppose that each country has 100 workers and completely specializes in its comparative advantage. How many units of output of sippy cups and binkys will each country produce?

d. Before trade, Narnia produces 25 binkys and 200 sippy cups, and Bedrock produces 50 binkys and 100 sippy cups. Show how specialization and free trade can make each country better off than it was before the trade situation.

Reference no: EM13159138

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