Now assume that a country A takes 100 hours to produce 20 aircraft or 10 jet engines and country B takes 100 hour to produce 15 aircraft or 5 jet engines.
- Which country has an absolute advantage in which product?
- Does either country have a comparative advantage in one of the product ?
- Can trade takes place between the two countries ?
- What would be the limit of the terms of trade if it were to take place ?