Homework answers / question archive / Suppose that France and Portugal both produce cheese and wine

Suppose that France and Portugal both produce cheese and wine

Economics

Share With

Suppose that France and Portugal both produce cheese and wine. France's opportunity cost of producing a bottle of wine is 2 pounds of cheese. That is, France forgoes the production of 2 pounds of cheese when it produces a bottle of wine. Portugal's opportunity cost of producing a bottle of wine is 4 pounds of cheese.

a) Who has the comparative advantage with cheese?

b) Who has the comparative advantage with wine?