1. An American worker can produce either 4 cars or 8 tons of grain a year. A Japanese worker can produce either 4 cars or 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers.Complete the following table with the number of workers needed to make one car or 1 ton of grain in the United States and Japan. How Many Workers NeededWorkers Needed to Make 1 Car1 Ton of Grain United States Japan 2.Use the blue line (circle symbol) to graph the production possibilities frontier for the American economy. Then use the green line (triangle symbol) to graph the production possibilities frontier for the Japanese economy. *The Graph includes on the left Cars(Millions) from 0-500 in increments of 50s the bottom of the garph is marked as Grains (Millions Of Tons) from 0-1000 in increments of 100s. 3. Complete the following table by determining the opportunity cost of a car and of a ton of grain for both the United States and Japan. Opportunity Cost of1 Car1 Ton of Grain(In terms of tons of grain given up)(In terms of cars given up)United States Japan 4. Given this information, (neither country, Japan, or the United States) has an absolute advantage in producing cars, and (neither country, Japan, or the United States) has an absolute advantage in producing grain. 5. Also, (neither country, Japan, or the United States) has a comparative advantage in producing cars, and (neither country, Japan, or the United States) has a comparative advantage in producing grain. 6. Assume that without trade, half of each country's workers produce cars and half produce grain.***Complete the following table with the quantities of cars produced and consumed in each country if there is no trade. Cars Produced and ConsumedTons of Grain Produced and Consumed(Millions)(Millions)United States Japan 7. True or False: Both countries would be better off if they produced the good in which they have a comparative advantage and then traded 300 million tons of grain for 200 million cars.

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Answered: An American worker can produce either 4…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. An American worker can produce either 4 cars or 8 tons of grain a year. A Japanese worker can produce either 4 cars or 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers.

Complete the following table with the number of workers needed to make one car or 1 ton of grain in the United States and Japan.

	How Many Workers Needed	Workers Needed to Make
	1 Car	1 Ton of Grain
United States
Japan

2.Use the blue line (circle symbol) to graph the production possibilities frontier for the American economy. Then use the green line (triangle symbol) to graph the production possibilities frontier for the Japanese economy.

*The Graph includes on the left Cars(Millions) from 0-500 in increments of 50s the bottom of the garph is marked as Grains (Millions Of Tons) from 0-1000 in increments of 100s.

3. Complete the following table by determining the opportunity cost of a car and of a ton of grain for both the United States and Japan.

	Opportunity Cost of
1 Car	1 Ton of Grain
(In terms of tons of grain given up)	(In terms of cars given up)
United States
Japan

4. Given this information, (neither country, Japan, or the United States) has an absolute advantage in producing cars, and (neither country, Japan, or the United States) has an absolute advantage in producing grain.

5. Also, (neither country, Japan, or the United States) has a comparative advantage in producing cars, and (neither country, Japan, or the United States) has a comparative advantage in producing grain.

6. Assume that without trade, half of each country's workers produce cars and half produce grain.

***Complete the following table with the quantities of cars produced and consumed in each country if there is no trade.

	Cars Produced and Consumed	Tons of Grain Produced and Consumed
(Millions)	(Millions)
United States
Japan

7. True or False: Both countries would be better off if they produced the good in which they have a comparative advantage and then traded 300 million tons of grain for 200 million cars.

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