Canada and Mexico produce cars and corn. The table below shows the maximum they can produce of each good in a day Maximum daily production Cars Canada Mexico 12 6. Corn (tons) 8. a. Does any of the two countries have an absolute advantage in the production of cars? Explain why. b. Which country has the comparative advantage in the production of corn? Explain why. c. If the two countries found terms of trade that make both of the better off, what good would Canada sell to Mexico? Why?

Canada and Mexico produce cars and corn. The table below shows the maximum they can produce of each good in a day Maximum daily production Cars Canada Mexico 12 6. Corn (tons) 8. a. Does any of the two countries have an absolute advantage in the production of cars? Explain why. b. Which country has the comparative advantage in the production of corn? Explain why. c. If the two countries found terms of trade that make both of the better off, what good would Canada sell to Mexico? Why?

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Description: Canada and Mexico produce cars and corn. The table below shows the maximumthey can produce of each good in a dayMaximum dailyproductionCarsCorn (tons)CanadaMexico126.8.a. Does any of the two countries have an absolute advantage in the production ofc

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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Similar questions

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?
In Germany it takes three workers to make one television and four workers to make one video camera. In Poland It takes six workers to make one television and 12 workers to make one video camera. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the production of video cameras? How can you tell? Calculate the opportunity cost of producing one additional television set in Germany and In Poland. (Your calculation may involve fractions, which Is tine.) Which country has a comparative advantage in the production of televisions? Calculate the opportunity cost of producing one video camera in Germany and in Poland. Which country has a comparative advantage in the production of video cameras? In this example, is absolute advantage the same as comparative advantage, or not? In what product should Germany specialize? In what product should Poland specialize?
Does intra-industry trade contradict the theory of comparative advantage?
How does comparative advantage lead to gains from trade?
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What is absolute advantage? What is comparative advantage?
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Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producingautos?WhatistheopportunitycostofproducingonepoundofbeefinBrazil?Whatistheopportunitycost of producing one pound of beef in the United States?
25. The countries of Mistania and Boonton each produce two goods: TVs and Computers. The table below lists the production for each good, for each country per year when each country uses half of their resources to produce each good. Country Production of TVs Production of Computers Mistania 175 Boonton 168 What is the opportunity cost of producing 1 TVs in Miscania Computers What is the opportunity cost of producing 1 TVs in Boonton Computers Which country has a comparative advantage in producing TV? Miscania OBoonton ONot enough information Which country has a comparative advantage in producing Computers? Mistania Boonton. ONot enough information If both countries decide to specialize and trade with each other, what would be the outcome? OConsumers in Mistania will not be able to purchase Computers anymore OProducers of Computers in Boonton will be lowering production Consumers in Mistania and Boonton can enjoy more at lower prices Consumers in Boonton will be the ones benefiting from…
The following graph is the respective production possibility curves for the USA and South Korea. It shows there total output of medical devices and cars in a state of autarky (no trade), and it illustrates the gains that both countries can benefit from when they engage in trade. 10,000 10,000 8,000 tc 8,000 6,000 6,000 Consumpfion wth trode Consumplion wih trode 4,000 4,000 2,000 2,000 D. 1,000 0.5 1 3 2. 3 Automobiles (millions) Automobiles (millions) (a) USA (b) South Korea Medical Devices Automobiles (millions) USA 4,000 0.5 million South Korea 1,000 2 million Answer the following questions utilizing the textbook and your lecture videos: 1) What assumption in the production possibilities model may lead the model to overstate the gains from trade and cause the actual gains to be less than predicted by the model? 2) Who gains from trade in this scenario? Who may be hurt by trade in this scenario? 3) Do you think there is a role for the government to help those who are hurt by trade in…
Suppose that France and Germany both produce wine and schnitzel. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Schnitzel (Pounds) Wine (Bottles) Schnitzel (Pounds) 8 15 1 6 1 12 2 4 2 9 3 3 6 4 4 3 Who has the comparative advantage in producing wine and who has the comparative advantage in producing schnitzel? O A. Germany has a comparative advantage producing wine and schnitzel. O B. France has a comparative advantage producing schnitzel and Germany has a comparative advantage producing wine. O C. France has a comparative advantage producing wine and Germany has a comparative advantage producing schnitzel. O D. France has a comparative advantage producing wine and schnitzel. O E. Neither has a comparative advantage producing wine or schnitzel.