scientists in a country, the part of a split-up value chain where they have their specialized learning,

economies of scale, and other factors can all determine comparative advantage.

2. Brazil has the absolute advantage in producing beef and the United States has the absolute advantage in

autos. The opportunity cost of producing one pound of beef is 1/10 of an auto; in the United States it is 3/4

of an auto.

3. In answering questions like these, it is often helpful to begin by organizing the information in a table, such

as in the following table. Notice that, in this case, the productivity of the countries is expressed in terms of

how many workers it takes to produce a unit of a product.

Country One Sweater One Bottle of wine

France

1 worker

1 worker

Tunisia

2 workers

3 workers

In this example, France has an absolute advantage in the production of both sweaters and wine. You can

tell because it takes France less labor to produce a unit of the good.

4. a.
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