Using the same amount of resources, China and Japan can each produce oranges and salmonberries as...

Using the same amount of resources, China and Japan can each produce oranges and salmonberries as shown in the following table, measured in thousands of bushels.

China		Japan
oranges	salmonberries	oranges	salmonberries
12	0	6	0
3	3	3	3
0	4	0	6

Which country has the comparative advantage in producing salmonberries? Which one has the comparative advantage in producing oranges? Explain.
Suppose that each country is currently producing 3 thousand bushels of salmonberries and 3 thousand bushels of oranges. Show that both can be better off if they specialize in producing one good and then engage in trade.

Expert Solution

Rahul Sunny answered 8 months ago

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Using the same amount of resources, China and Japan can each produce oranges and salmonberries as...

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