The table below shows how many boogie boards and surfboards Mexico and Costa Rica can produce...

The table below shows how many boogie boards and surfboards Mexico and Costa Rica can produce each day:

	Mexico	Costa Rica
Boogie Board	250	210
Surfboards	50	30

Which country has the absolute advantage in producing boogie boards? Which country has the absolute advantage in producing surfboards?

What are the opportunity costs of producing boogie boards and surfboards for both Mexico and Costa Rica?

Which country has the comparative advantage in producing boogie boards? Which country has the comparative advantage in producing surfboards?

At what range of trade prices would both countries be better off?

How could the two countries gain from trading with one another? Which good would Mexico import/export? Which goods would Costa Rica import/export?

Expert Solution

Rahul Sunny answered 3 years ago

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