EC120 Lecture Notes - Lecture 2: Durable Good, False Advertising, Paul Krugman
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Canada put regulations in place in the early 900s limiting trade in wine. Most ontario restrictions remain in place- importing wine from other provinces is limited. This is due to the fact that the federal govn"t makes a large profit off of wine sales in ontario. Who has a comparative//absolute advantage in wine production- ontario or. Producing a ton of wheat takes 5hrs of labour. Producing a ton of wheat takes 4 hours of labour. Producing a car takes 100 hours of labour. Draw the production possibility frontier for the us. Assume canada is producing 50 cars per day. Assume the us is producing 500 cars per day. They are producing 550 cars and 14,500 tons of. How much more could they produce if they. A producer can produce output using a smaller quantity of inputs. The us has an absolute advantage in producing wheat and in producing cars.
