Homework Help is Here – Start Your Trial Now!
Business
Economics
2. Absolute and comparative advantage Cor Activity Frame hboring island countries, Charisma and Fiatstan. Each has 72,000 labor hours available per week that it can use to produce jeans, wheat, or a combination of both. The following table shows the amount of labor hours required to produce 1 pair of jeans or 1 bushel of wheat. Country Charisma Fiatstan Jeans Wheat (Labor hours per pair) (Labor hours per bushel) 80 24 16 12 has an absolute advantage in the production of jeans, and of wheat. has an absolute advantage in the production Initially, suppose Charisma uses 54,000 hours of labor per week to produce jeans and 18,000 hours per week to produce wheat, while Fiatstan uses 18,000 hours of labor per week to produce jeans and 54,000 hours per week to produce wheat. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of jeans and wheat it produces. Charisma's opportunity cost of producing 1 pair of jeans is is of wheat. Therefore, comparative advantage in the production of wheat. of wheat, and Fiatstan's opportunity cost of producing 1 pair of jeans has a comparative advantage in the production of jeans, and has a is When neither country specializes, the total production of jeans is bushels per week. pairs per week, and the total production of wheat Suppose that Charisma completely specializes in the production of the good in which it has a comparative advantage, producing only that good. It will produce . Suppose also that Fiatstan does not specialize and uses 54,000 hours of labor to produce jeans and pairs of jeans and 18,000 hours of labor to produce wheat. It will produce bushels of wheat. Suppose Charisma and Fiatstan agree to trade with each other, exchanging 1,100 pairs of jeans for 3,300 bushels of wheat. In particular, Charisma will export the goods it produces, and Fiatstan will export the goods that Charisma does not produce.

2. Absolute and comparative advantage Cor Activity Frame hboring island countries, Charisma and Fiatstan. Each has 72,000 labor hours available per week that it can use to produce jeans, wheat, or a combination of both. The following table shows the amount of labor hours required to produce 1 pair of jeans or 1 bushel of wheat. Country Charisma Fiatstan Jeans Wheat (Labor hours per pair) (Labor hours per bushel) 80 24 16 12 has an absolute advantage in the production of jeans, and of wheat. has an absolute advantage in the production Initially, suppose Charisma uses 54,000 hours of labor per week to produce jeans and 18,000 hours per week to produce wheat, while Fiatstan uses 18,000 hours of labor per week to produce jeans and 54,000 hours per week to produce wheat. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of jeans and wheat it produces. Charisma's opportunity cost of producing 1 pair of jeans is is of wheat. Therefore, comparative advantage in the production of wheat. of wheat, and Fiatstan's opportunity cost of producing 1 pair of jeans has a comparative advantage in the production of jeans, and has a is When neither country specializes, the total production of jeans is bushels per week. pairs per week, and the total production of wheat Suppose that Charisma completely specializes in the production of the good in which it has a comparative advantage, producing only that good. It will produce . Suppose also that Fiatstan does not specialize and uses 54,000 hours of labor to produce jeans and pairs of jeans and 18,000 hours of labor to produce wheat. It will produce bushels of wheat. Suppose Charisma and Fiatstan agree to trade with each other, exchanging 1,100 pairs of jeans for 3,300 bushels of wheat. In particular, Charisma will export the goods it produces, and Fiatstan will export the goods that Charisma does not produce.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter2: Choice In A World Of Scarcity
Section: Chapter Questions
Problem 10RQ: What is comparative advantage?
See similar textbooks
icon
Related questions
Question
None
2. Absolute and comparative advantage Cor Activity Frame hboring island countries, Charisma and Fiatstan. Each has 72,000 labor hours available per week that it can use to produce jeans, wheat, or a combination of both. The following table shows the amount of labor hours required to produce 1 pair of jeans or 1 bushel of wheat. Country Charisma Fiatstan Jeans Wheat (Labor hours per pair) (Labor hours per bushel) 80 24 16 12 has an absolute advantage in the production of jeans, and of wheat. has an absolute advantage in the production Initially, suppose Charisma uses 54,000 hours of labor per week to produce jeans and 18,000 hours per week to produce wheat, while Fiatstan uses 18,000 hours of labor per week to produce jeans and 54,000 hours per week to produce wheat. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of jeans and wheat it produces. Charisma's opportunity cost of producing 1 pair of jeans is is of wheat. Therefore, comparative advantage in the production of wheat. of wheat, and Fiatstan's opportunity cost of producing 1 pair of jeans has a comparative advantage in the production of jeans, and has a is When neither country specializes, the total production of jeans is bushels per week. pairs per week, and the total production of wheat Suppose that Charisma completely specializes in the production of the good in which it has a comparative advantage, producing only that good. It will produce . Suppose also that Fiatstan does not specialize and uses 54,000 hours of labor to produce jeans and pairs of jeans and 18,000 hours of labor to produce wheat. It will produce bushels of wheat. Suppose Charisma and Fiatstan agree to trade with each other, exchanging 1,100 pairs of jeans for 3,300 bushels of wheat. In particular, Charisma will export the goods it produces, and Fiatstan will export the goods that Charisma does not produce.
Transcribed Image Text:2. Absolute and comparative advantage Cor Activity Frame hboring island countries, Charisma and Fiatstan. Each has 72,000 labor hours available per week that it can use to produce jeans, wheat, or a combination of both. The following table shows the amount of labor hours required to produce 1 pair of jeans or 1 bushel of wheat. Country Charisma Fiatstan Jeans Wheat (Labor hours per pair) (Labor hours per bushel) 80 24 16 12 has an absolute advantage in the production of jeans, and of wheat. has an absolute advantage in the production Initially, suppose Charisma uses 54,000 hours of labor per week to produce jeans and 18,000 hours per week to produce wheat, while Fiatstan uses 18,000 hours of labor per week to produce jeans and 54,000 hours per week to produce wheat. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of jeans and wheat it produces. Charisma's opportunity cost of producing 1 pair of jeans is is of wheat. Therefore, comparative advantage in the production of wheat. of wheat, and Fiatstan's opportunity cost of producing 1 pair of jeans has a comparative advantage in the production of jeans, and has a is When neither country specializes, the total production of jeans is bushels per week. pairs per week, and the total production of wheat Suppose that Charisma completely specializes in the production of the good in which it has a comparative advantage, producing only that good. It will produce . Suppose also that Fiatstan does not specialize and uses 54,000 hours of labor to produce jeans and pairs of jeans and 18,000 hours of labor to produce wheat. It will produce bushels of wheat. Suppose Charisma and Fiatstan agree to trade with each other, exchanging 1,100 pairs of jeans for 3,300 bushels of wheat. In particular, Charisma will export the goods it produces, and Fiatstan will export the goods that Charisma does not produce.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS