international trade and finance 7
Open the Excel file compad198.xls. What you will see is the same graph and table of input productivities in the U.S. and France we used in the earlier example. In addition, you will see two more tables. The first shows productivity in the two countries in terms of input requirements (workers required per flag or per case of water) instead of the outputs per worker. But these two ways of describing productivity are linked to each other. For example, if daily output per worker in the U.S. is ten flags, then the input requirement for producing one flag is 0.1 workers. The reason for including the table with input requirements is that some instructors prefer to talk about absolute and comparative advantage in those terms. So the data are included here. You won’t need the data on input requirements to get the answers in this problem set. You can experiment with the labor productivities by changing the values in the top table, and seeing what happens to the table of input requirements.