Question

Based on your answers to Problem $32-1$, which nation has a comparative advantage in producing pastries? Which nation has a comparative advantage in producing sandwiches?

Short answer

There in Northland, the incremental cost of producing a pie is smaller than on the West Side. As a result, the Northland seems to have a market edge in the bakery business.

With in West Coast, the economic cost of producing a sandwiches seems smaller than it is in the Northland. As a corollary, us Coastal Region does indeed have a comparative benefit in Bagel creation.

Step-by-step solution

Introduction

It is also wise to note that economic power pertains to the a persons actions or indeed a nation's economic potential to construct an item or service at a lower potential cost comparative toward this specific dealer

Given Information

The table shows however much doughnuts and hamburgers are prepared in Northland and also on the West Coast:

Explanation of Northland

Consequently, in Northland, the market price of pastry is obtained as follows:

You could see from the table well above the:

$\text{Northland Production of Sandwich}=25,000$

$\text{Northland Production of}\text{Pastries}=50,000$

That economic cost is determined as changing the variables there in expression elsewhere here:

$\text{Opportunity Cost}=\frac{\text{Northland Production of Sandwich}}{\text{Northland Production of Pastries}}$

$=\frac{25,000}{50,000}$

$=0.5$

As a conclusion, in Northeast, the opportunity of croissants is $0.5$hamburgers for dessert.

Northland sandwich

Consider a burrito actual cost in Northland then.

It's also computed as follows:

$\text{Oppertunity Cost}=\frac{\text{NorthlandProduction of Pastries}}{\text{Northland Production of Sandwich}}$

role="math" $=\frac{50,000}{25,000}$

$=2$

Like a conclusion, in Northeast, median marginal utility of either a hamburger is $2$donuts each plate.

Explanation of West coast

Consequently, in west coast, the market price of pastry is obtained as follows:

You could see from the table well above the:

$\text{WestcoastProduction of Sandwich}=100,000$

$\text{WestcoastProduction of}\text{Pastries}=200,000$

That economic cost is determined as changing these elements that have been described some where else:

$\text{Opportunity Cost}=\frac{\text{WestcoastProduction of}\text{Pastries}}{\text{WestcoastProduction ofSandwich}}$

$=\frac{100,000}{200,000}$

$=0.5$

As either a summary, overall typical economic cost of even a hamburger is$0.5$or just a patty identical here to coastline

West coast sandwich

Consider a burrito actual cost in West coast then.

It's also computed as follows:

$\text{Opportunity Cost}=\frac{\text{WestcoastProduction of Sandwich}}{\text{WestcoastProduction of Pastries}}$

$=\frac{200,000}{100,000}$

$=2$

As a conclusion, in Northeast, the opportunity of croissants is $2$hamburgers for dessert