The following table shows the amount of resources (in man-hours) required to produce good A or good B in Oceanland and Funland, respectively.

A

B

Oceanland

X

12

Funland

6

18

If Oceanland has a comparative advantage in producing A, then, the maximum value of X should be strictly smaller than **[Answer]**.

(In decimal numbers, with two decimal places, please.)

Answer:Question 1

To find the maximum value of \( X \) for which Oceanland has a comparative advantage in producing good A, we need to compare the opportunity costs of producing good A in both Oceanland and Funland.

### Step 1: Opportunity Cost for Oceanland
- In Oceanland, producing 1 unit of good B takes 12 man-hours.
- Let \( X \) be the man-hours needed to produce 1 unit of good A in Oceanland.

The opportunity cost of producing 1 unit of good A in Oceanland is how much of good B they give up by producing 1 unit of A instead. That is:

\[
\text{Opportunity cost of A in Oceanland} = \frac{\text{Man-hours to produce A}}{\text{Man-hours to produce B}} = \frac{X}{12}
\]

### Step 2: Opportunity Cost for Funland
- In Funland, producing 1 unit of good A takes 6 man-hours, and producing 1 unit of good B takes 18 man-hours.

The opportunity cost of producing 1 unit of good A in Funland is:

\[
\text{Opportunity cost of A in Funland} = \frac{6}{18} = 0.33
\]

### Step 3: Comparative Advantage Condition
For Oceanland to have a comparative advantage in producing good A, the opportunity cost of producing A in Oceanland must be **lower** than the opportunity cost of producing A in Funland. Thus, we need:

\[
\frac{X}{12} < 0.33
\]

### Step 4: Solve for \( X \)
To find the maximum value of \( X \), multiply both sides of the inequality by 12:

\[
X < 0.33 \times 12
\]

\[
X < 3.96
\]

Therefore, the maximum value of \( X \) should be strictly smaller than **3.96**.

---

Would you like further details or clarification on any step? Here are some additional related questions:

1. What is the opportunity cost of producing good B in Oceanland and Funland?
2. How do you determine absolute advantage between Oceanland and Funland?
3. If the value of \( X \) were 4, what would the opportunity costs imply?
4. What would happen if Oceanland and Funland specialized in the good for which they have a comparative advantage?
5. How does comparative advantage differ from absolute advantage?

**Tip**: Comparative advantage is about the lowest opportunity cost, not necessarily the lowest absolute production cost.

The following table shows the amount of resources (in man-hours) required to produce good A or good B in Oceanland and Funland, respectively.

A

B

Oceanland

X

12

Funland

6

18

If Oceanland has a comparative advantage in producing A, then, the maximum value of X should be strictly smaller than [Answer]. (In decimal numbers, with two decimal places, please.)

Learn how to determine the maximum value of X for which Oceanland has a comparative advantage in producing good A over Funland. This detailed solution covers key concepts such as opportunity cost, comparative advantage, and inequalities, making it suitable for students in Grades 9-12.

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