6. Consider the following equations describing two counties A and B’s possible combinations of bread (Qb) and wine (Qw)
Production: County A: Qb = 10 − 2Qw County B: Qb = 7 − Qw
A) Graph each counties Production Possibilities Frontier for bread and wine (on the same graph). Carefully label each component.
B) Which county has the absolute advantage in wine? Which county has the absolute advantage in bread? Explain (briefly) how you know.
C) Who has the comparative advantage in wine? Who has the comparative advantage in bread?
