I need some help in my tutorial. Here are the questions which i find difficulty in answering:
Q3
You are given the information shown in the table about production relationships in NZ and Australian. You made several Ricardian assumptions: These are the only two commodities, there are constant rations input to output whatever the level of output of wine and chocolate, and competition prevails in all markets.
Labour Hours per bottle of wine Labour hours per kilogram of chocolate
New Ze 15 10
Australia 10 4
NZ has 30 million hours of labour in total per year. Australia has 20 million hours of labour per year
1. which country has an absolute advantage in wine? In chocolate?
2. which country has a comparative advantage in wine? In chocolate?
3. Does each country gain from trade? Explain, referring your graphs as is appropriate?
4. in this free-trade equilibrium, 2 million kilos of chocolate and 1 million bottles of wine are traded. What is the consumption point in each country with free trade? Show this graphically using community indifference curves..
Tks.
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Help in Econs tutorial 
