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1. Absolute advantage and comparative advantage A AaB Suppose you have the following information on the marginal product of l
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Answer #1

Opportunity cost of rice in Japan= 12/15 = 0.8 apparels

Opportunity cost of apparel in Japan = 15/12 = 1.25

Opportunity cost of rice in Thailand = 5/10 = 0.5 apparels

Opportunity cost of apparel in Thailand = 10/5 = 2

The information given suggests that Japan has an absolute advantage in the production of rice and apparel and that Thailand has an absolute advantage in the production of nothing.

The information given suggests that Japan has a competitive advantage in the production of apparels and Thailand has a comparative advantage in the production of rice.

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