Suppose the following output and labor hours

Reference no: EM1340168

International Trade and Comparative Advantage

Assume the following output and labor hours for Russia and Germany in producing Wheat and Cloths

Russia Wheat 3 Cloths 6 Labor Hours 100
Germany Wheat 2 Cloths 2 Labor Hours 50

a. Which country has the comparative advantage in wheat?
b. Which country has the comparative advantage in cloth?
c. Which country has the absolute advantage in wheat?
d. Which country has the absolute advantage in cloth?
e. Which good will Russia specialize in?
f. Which good will Germany specialize in?
g. Give the most obvious terms of trade.

Reference no: EM1340168

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