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  • Consider The Following Productivities

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    Shourav Rahman
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    The document compares productivity rates of services and manufacturing in the US and England. It calculates that the opportunity cost of services is 2 units of manufacturing per unit of services in the US, and 6 units of manufacturing per unit of services in England. It also calculates that the opportunity cost of manufacturing is 6 units of services per unit of manufacturing in the US and 3 units of services per unit of manufacturing in England. Therefore, the US has a comparative advantage in services.

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    The document compares productivity rates of services and manufacturing in the US and England. It calculates that the opportunity cost of services is 2 units of manufacturing per unit of services in the US, and 6 units of manufacturing per unit of services in England. It also calculates that the opportunity cost of manufacturing is 6 units of services per unit of manufacturing in the US and 3 units of services per unit of manufacturing in England. Therefore, the US has a comparative advantage in services.

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    14 views1 page

    Consider The Following Productivities

    Uploaded by

    Shourav Rahman
    The document compares productivity rates of services and manufacturing in the US and England. It calculates that the opportunity cost of services is 2 units of manufacturing per unit of services in the US, and 6 units of manufacturing per unit of services in England. It also calculates that the opportunity cost of manufacturing is 6 units of services per unit of manufacturing in the US and 3 units of services per unit of manufacturing in England. Therefore, the US has a comparative advantage in services.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Consider the following productivities:

    United States England


    Services 6 Units/hr 3 Units/hr
    Manufacturing 2 Units/hr. 6 Units/hr.

    a) Calculate the opportunity cost of services in the US and England

    US: .33 6 2  Units of manufacturing per unit of services


    England: 2 3 6  Units of manufacturing per unit of services

    b) Calculate the opportunity cost of manufacturing in the US and England. Who has the comparative
    advantage in services?

    US: 3 2 6  Units of Services per unit of manufacturing

    England: .5 6 3  Units of Services per unit of manufacturing

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