The next five questions refer to the following situation: Consider two coun- tries, Westeros and Meereen....

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Answer 1

Answer #1

1. Ans: A ) Meereen

2. Ans: B ) Westeros

3. Ans: A ) Meereen

Explanation:

Westeros 's opportunity cost of producing slaves = 3000 / 2000 = 1.5

Meereen's opportunity cost of producing slaves = 1000 / 3000 = 0.33

So it is cleared that Meereen's has comparative advantage in producing slaves due to lower opportunity cost .

4. Ans: D ) Westeros will produce 3,000 kg of wine, and Meereen will produce 3,000 slaves.

Explanation:

Westeros 's opportunity cost of producing slaves = 3000 / 2000 = 1.5

Meereen's opportunity cost of producing slaves = 1000 / 3000 = 0.33

Westeros 's opportunity cost of producing wine = 2000 / 3000 = 0.66

Meereen's opportunity cost of producing wine = 3000 / 1000 = 3

5. C ) Yes, both country can consume more.

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