The fixed labour requirements per unit of wine and clothing production before trade for England and Portugal are given below :
| Wine | Clothing | |
|---|---|---|
| England | 6 | 10 |
| Portugal | 3 | 5 |
If trade opens up between England and Portugal, what will be the pattern of trade according to comparative advantage?
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Theories of international trade has come up 151 times in 6 exams since 2006.
This question is on Absolute and comparative advantage, part of Theories of international trade in International Economics.
Why countries trade: producing more cheaply in absolute terms, or at lower opportunity cost.
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Question from the JNU SIS 2013 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.