COMPARATIVE ADVANTAGE AND GAINS FROM TRADE (Ricardo) Which country (Ghana or Sou

Question

COMPARATIVE ADVANTAGE AND GAINS FROM TRADE (Ricardo) Which country (Ghana or South Korea) has an absolute advantage over the production of both products? Resoures Required to Produce 1 Ton of Cocoa and Rice Resources availability in units Ghana South Korea Rice 6.66 10 (factor: 1.5) Cocoa 100 100 Ghana South Korea Resources Resources Resources 20 (factor: 4) Resources Production and Consumption without Trade Both countries spend half of their resources on the production of Cocoa an Rice Ghana South Korea Cocoa Ghana South Korea Ton Ton Ton on Ton Ton 50/ Cocoa 50/ Cocoa 50/ Rice 50/ Rice Total production 0 Production with Specialization Both countries specialize Ghana South Korea Cocoa Rice 75/Cocoa 25/Rice o/ Cocoa 100/Rice Ghana South Korea Ton Ton Ton Ton Ton Ton Total production 0 Consumption after Ghana Trades 4 Tons of Cocoa for 4 Tons of South Korean Rice Cocoa Rice Ghana South Korea Ton Ton Ton Ton Increase in consumption as a result of Specialization and Trade Ghana South Korea Cocoa 0.00 0.00 0.00 0.00

Explanation / Answer

Which country (Ghanna or South Korea) has an absolute advantage over the production of both products?".

GHANA has an absolute advantage over the production of both products, because-

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