Consider the table to the right, which shows possible combinations of hourly out

Question

Consider the table to the right, which shows possible combinations of hourly outputs of modems and flash memory drives in South Shore and neighboring East Isle, in which opportunity costs of producing both products are constant South Shore East Isle Modems Flash Drives Modems Flash Drives 75 100 80 60 40 20 Enfer all numenic responses as whole numbers or decimals rounded to two places In South Shore, the opportunity cost of producing 1 modem is fash drives,and the opportunity cost of producing 1 flash memory drive is modems 45 30 15 30 60 90 120 150 10 20 30 40 50 In East Isle, the opportunity cost of producing 1 modem is flash drivesand the opportunity cost of producing 1 flash memory drive is modems. The nation having a comparative advantage in producing modems is therefore | while the nation with the comparative advantage in flash drive East Isle South Shore Enter your answer in each of the answer boxes

Explanation / Answer

In South Shore, the opportunity cost of producing 1 modem is: 30/15 = 2 flash drives

In South Shore, the opportunity cost of producing 1 flash drive is: 15/30 = 0.5 modems

In East Isle, the opportunity cost of producing 1 modem is: 10/20 = 0.5 flash drives

In East Isle, the opportunity cost of producing 1 flash drive is: 20/10 = 2 modems

Comparative advantage in modems: East Isle

Comparative advantage in flash drive: South shore

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