Comparative Advantage

Newland - 10 cloth, 2 food

Beeland - 10 cloth, 1 food

The table above shows the production possibilities of two nations that are producing cloth and food, using equal amounts of resources.

A1 - Calculate the opportunity cost of producing a unit of cloth in Newland.

A2 - Calculate the opportunity cost of producing a unit of food in Beeland.

B1 - Which nation has the comparative advantage in cloth production?

B2 - Which nation has the comparative advantage in food production?

C - Now assume that the productivity of Beeland's workers triples for each good.

C1 - Which country has a comparative advantage in food production?

C2 - Explain how you determined your answer.

*Taken from the College Board released free response questions

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Welcome Class of 2012

Welcome Class of 2012. This AP Economics course will go into great depth on the backbone and structure of our Capitalist system. This blog will be an excellent resource for you to get questions answered and review important themes that my have been neglected during class times. We have a very aggressive schedule that will require some out of class time study. This will be an excellent way to keep track.

I am glad you have selected this course. Its gonna be a fun ride.