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Economics is concerned with the allocation of scarce resources. Fewer resources are foregone if Country A concentrates its resources in the production of maize.
Now consider the opportunity cost of Country B producing one more unit of wheat. Two units of maize have been foregone. When Country B produces one more unit of wheat only half a unit of maize is foregone...
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Two units of maize have been foregone. When Country B produces one more unit of wheat only half a unit of maize is foregone. Fewer resources are foregone if Country B specialises in the production of wheat. In the above case Country A should produce maize and Country B wheat. The surpluses produce should then be traded...
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Difference between absolute and comparative advatage
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