Homework Answers
Answer
A country specialize as per the lower opportunity costs
The opportunity cost of a good=maximum production of other good/
Maximum production of the good
The opportunity cost of Food for Germany=20/10=2 cans
The opportunity cost of Food for Koria =10/10=1 can
Korea has a comparative advantage in Food and Germany in cans
the production of foods =10 units and production of cans =20
units
old production of
Foods=6+4=10 units
Cans=8+6=14
so the total production increases for only 6 cans
Option 1
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