constant cost production. Home produces 0.5 ton of corn or 1 ton of wheat with a day of labor. Without trade (in autarky), Home's daily production is 20 tons of wheat and 10 tons of corn. Now suppose that Home has the opportunity to trade with Foreign at an international price of 1 ton of wheat per ton of corn. In which product will Home find its comparative advantage? O wheat O corn Home will find its competitive advantage in neither corn nor whea Home will find its competitive advantage in both corn and wheat

constant cost production. Home produces 0.5 ton of corn or 1 ton of wheat with a day of labor. Without trade (in autarky), Home's daily production is 20 tons of wheat and 10 tons of corn. Now suppose that Home has the opportunity to trade with Foreign at an international price of 1 ton of wheat per ton of corn. In which product will Home find its comparative advantage? O wheat O corn Home will find its competitive advantage in neither corn nor whea Home will find its competitive advantage in both corn and wheat

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

3. Gains from trade Consider two neighboring island countries called Felicidad and Arcadia. They each have 4 million labor hours available per month that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor. Jeans Corn Country (Pairs per hour of labor) (Bushels per hour of labor) Felicidad 5 20 Arcadia 8 16 Initially, suppose Arcadia uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn, while Felicidad uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Felicidad produces 15 million pairs of jeans and 20 million bushels of corn, and Arcadia produces 8 million pairs of jeans and 48 million bushels of corn. 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…
If the government of brazil allows free trade and the world price is $10, then
The fictional country of Anastialia is a small country with rich resources in minerals. In a day it can produce 100 pounds of silver or 50 pounds of copper. Another country, West Burma, can produce 25 pounds of silver or 5 pounds of copper in a day. From this data, which country has the comparative advantage in copper production by producing it at a lower opportunity cost? O Neither country has a comparative advantage. O Anastialia O West Burma
Use the information in the table below to answer the following question: Which of the following is true? per unit of Labor: U.S Production Argentina 20 Whe at 300 Beef 100 20 a) The United States has an absolute advantage in the production of Wheat. O b) The United States does not have an absolute advantage in any commodity. c) Argentina has an absolute advantage in the production of Wheat. d) Argentina has an absolute advantage in the production of Beef.
1. One German worker can produce either 5 cars or 10 tons of grain a year. One 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. Japan well as the PPE 6 L which country has an absolute advantage in produ f) Given all the information above, which country has a comparative advantage in producing cars? Which country has a comparative advantage in producing grain? Why? g) Both countries will spend 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. Car Produced and Consumed (million) Tons of Grain Produced and Consumed (million) Germany Japan h) If each country only produces the good in which they have a comparative advantage and then traded 300 million tons of grain for 200 million cars, will both countries be better off? Why?
An automobile company has two factories, one in Vietnam and one in Australia, each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 200 engines or 150 transmissions per day. A. Which factory has an advantage is irrelevant since the theory of comparative advantage only applies to countries, not companies. B. The Australian factory has an comparative advantage in the production of transmissions. C. The Vietnamese factory has an absolute advantage producing both engines and transmissions. D. The Vietnamese factory has a comparative advantage in the production of transmissions.
LENTILS (Millions of pounds) 80 70 8 60 50 40 30 20 10 + 0 0 PPF 10 Shenandoah 20 30 40 50 60 PEAS (Millions of pounds) 70 80 (?) LENTILS (Millions of pounds) 80 70 60 50 40 30 PPF 20 10 0 0 T 10 Denali 40 20 30 50 60 PEAS (Millions of pounds) 70 80 (?) Shenandoah has a comparative advantage in the production of , while Denali has a comparative advantage in the production of . Suppose that Shenandoah and Denali specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of peas. million pounds of lentils and million pounds of Suppose that Shenandoah and Denali agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 20 million pounds of peas for 20 million pounds of lentils. This ratio of goods is known as the price of trade between Shenandoah and Denali. The following graph shows the same PPF for Shenandoah…
The graph shows the PPC for a country that can produce coffee or butter. Pounds of coffee (thousands) 3 4 5 6 Pounds of butter (thousands) O True 8 The straight line is the trade line and CPC if production is at Point A. This country has a comparative advantage in coffee. O False h
Please asap answer
Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Cheese (Pounds) 16 Wine (Bottles) Cheese (Pounds) 12 8. 4. 25 20 15 2 3 3 4 10 4 Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese? O A. France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese. O B. France has a comparative advantage producing wine and cheese. OC. Germany has a comparative advantage producing wine and cheese. -OD. Neither has a comparative advantage producing wine or cheese. OE. France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine. Suppose that France is currently producing 1 bottle of wine and 12 pounds of cheese and Germany is currently producing 3 bottles of wine and 10 pounds of cheese. Then, assume instead that France and…
The figure below shows the hypothetical domestic supply and demand for baseball caps in the country of Spain. Domestic Supply and Demand for Baseball Caps Spain Price (€ per cap) 10 X 10 20 30 40 50 60 70 80 90 100 9 8 7 5 3 2 1 0 Sd Dd
Need help