3
The mistake that you are doing is that you are treating the numbers in the table below that I assume you took from wikipedia as quantities that can be produced but they are not
Cloth Wine
England 100 120
Portugal 90 80
Wikipedia states that in the problem they present these are "hours of work necessary to produce one unit" of given goods. ...
1
this is attributed to better computer-production technology in the US. But what is that technology? Is it better physical capital, in the form of computer-building machines? Is it better human capital?
In a sense yes. For example, typical Cobb-Douglas function with capital labor and human capital would look like this:
$$Y = A K^{\alpha} L^{\beta} H^{1-\...
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