### Production Efficiency in Chile and Argentina#### Context:Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000 hours of labor available.#### Production Rates:- **Chile**: - 1 hour of labor produces 1 pound of jellybeans. - 2 hours of labor produce 1 pound of peanut butter.- **Argentina**: - 1 hour of labor produces 1 pound of jellybeans. - 3 hours of labor produce 1 pound of peanut butter.#### Consumption Before Trading:- **Chile**: - Consumes 600 pounds of jellybeans. - Consumes 200 pounds of peanut butter.- **Argentina**: - Consumes 400 pounds of jellybeans. - Consumes 200 pounds of peanut butter.#### Question:What is the price of peanut butter in Argentina before the two countries begin to trade with each other?#### Answer Options:- ○ 1/3 pound of jellybeans per pound of peanut butter- ○ 1/2 pound of jellybeans per pound of peanut butter- ○ 2 pounds of jellybeans per pound of peanut butter- ● 3 pounds of jellybeans per pound of peanut butter### Analysis:In Argentina, it takes 3 hours to produce 1 pound of peanut butter. In that same time, they could produce 3 pounds of jellybeans (since 1 hour produces 1 pound).Thus, the price of peanut butter in Argentina before trade is 3 pounds of jellybeans per pound of peanut butter.**Selected Answer: 3 pounds of jellybeans per pound of peanut butter**This ratio helps to illustrate the opportunity cost and comparative advantage, foundational concepts in international trade economics.

Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…

Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000 hours of labor. In Chile, an hour produces a pound of jellybeans and 2 hours produce a pound of peanut butter. In Argentina, an hour produces a pound of jellybeans and 3 hours produce a pound of peanut butter. When they do not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. What is the price of peanut butter in Argentina before the two countries begin to trade with each other? O 1/3 pound of jellybeans per pound of peanut butter O 1/2 pound of jellybeans per pound of peanut butter 2 pounds of jellybeans per pound of peanut butter 3 pounds of jellybeans per pound of peanut butter

Chile and Argentina each produce jellybeans and peanut butter, using labor as their only resource. Each country has 1,000 hours of labor. In Chile, an hour produces a pound of jellybeans and 2 hours produce a pound of peanut butter. In Argentina, an hour produces a pound of jellybeans and 3 hours produce a pound of peanut butter. When they do not trade with each other, Chile consumes 600 pounds of jellybeans and 200 pounds of peanut butter, and Argentina consumes 400 pounds of jellybeans and 200 pounds of peanut butter. What is the price of peanut butter in Argentina before the two countries begin to trade with each other? O 1/3 pound of jellybeans per pound of peanut butter O 1/2 pound of jellybeans per pound of peanut butter 2 pounds of jellybeans per pound of peanut butter 3 pounds of jellybeans per pound of peanut butter

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Sam can brew 5 gallons of root beer in an hour or he can make 4 pizzas in an hour. Ben can brew 7 gallons of root beer in an hour or he can make 5 pizzas in an hour. Who has an absolute advantage in making pizza? [ Select ] ["Ben", "Sam"] Who has a comparative advantage in making pizza? [ Select ] ["Sam", "Ben"]
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following question: Who has absolute advantage in the production of hamburgers and who has absolute advantage in the production of pancakes?
Q.1
The US and France each have 100 hours of labor to allocate between producing cheese and bread. With 1 labor hour, the US can produce either 100 loaves of bread, or 1 wheel of cheese. With 1 labor hour, France can produce either 400 loaves of bread, or 2 wheels of cheese. Suppose the countries jointly decide to produce a combined amount of 45000 loaves of bread. What is the maximum amount of cheese they can jointly produce? 50 wheels O wheels 100 wheels 25 wheels Moving to another question will save this response. Question 5 of 25
Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following question: Who has comparative advantage in the production of hamburgers and who has comparative advantage in the production of pancakes?
Suppose there exist two imaginary countries, Everglades and Denali. Their labor forces are each capable of supplying four million hours per day that can be used to produce shorts, almonds, or some combination of the two. The following table shows the amount of shorts or almonds that can be produced by one hour of labor. Country Shorts Almonds (Pairs per hour of labor) (Pounds per hour of labor) Everglades 4 16 Denali 6 12 Suppose that initially Denali uses 1 million hours of labor per day to produce shorts and 3 million hours per day to produce almonds, while Everglades uses 3 million hours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Everglades produces 12 million pairs of shorts and 16 million pounds of almonds, and Denali produces 6 million pairs of shorts and 36 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two…
If a country can produce more of a good than other countries with a given amount of resources, we say that country has the| [ Select ] and if a country has less to lose in producing a good than other countries do, we say that country has [ Select ]
The table below shows the production of oil and lumber of ONE worker in China and India: rice (in pounds) shirts (unit) CHINA 400 200 INDIA 330 110 a) BEFORE trade (or with no trade), each country has 100 workers, and they allocate the worker for the production of the goods in the following way: China allocates 35 workers in the production of rice, and 65 workers in the production of shirts; India allocates 50 workers in the production of rice and 50 workers in the production of shirts. Find the maximum production and consumption of both goods for each country! b) If the countries decide to engage in trade (WITH TRADE), they will specialize in the production of the good in which they have comparative advantage. In which good should China specialize? How about India? JUSTIFY! (To answer this question you must calculate the opportunity cost of each good for both countries and then find the country's comparative advantage). What is the WITH TRADE production of the countries? c) If the…
Consider two neighboring island countries called Bellissima and Felicidad. They each have 4 million labor hours available per week that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. Country Corn Jeans (Bushels per hour of labor) (Pairs per hour of labor) Bellissima 8 16 Felicidad 5 20 Initially, suppose Bellissima uses 1 million hours of labor per week to produce corn and 3 million hours per week to produce jeans, while Felicidad uses 3 million hours of labor per week to produce corn and 1 million hours per week to produce jeans. Consequently, Bellissima produces 8 million bushels of corn and 48 million pairs of jeans, and Felicidad produces 15 million bushels of corn and 20 million pairs of jeans. 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…
Which country has an absolute advantage in the production of coffee?
Suppose there exist two imaginary countries, Congaree and Yosemite. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor.
In Lima one worker can produce either 21 bushels of corn of 5 pounds of tomatoes in one day. In Puma one worker can produce either 54 bushels of corn or 7 pounds of tomatoes in one day. The country that specializes in tomato production is willing to sell one pound of tomatoes for at least how many bushels of corn?