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(a) Which country has a comparative advantage in producing ethanol

19 / 01 / 2019 Economics

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Australia can produce 50 barrels of ethanol or 30 tonnes of wheat a day, while the United States can produce 120 barrels of ethanol or 20 tonnes of wheat a day.
(a)    Which country has a comparative advantage in producing ethanol and which country has a comparative advantage in producing wheat? Explain why.  


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