Currently Bob is producing 8 apples and 9 peppers, while John is producing 3 apples and 3 peppers. If they instead specialized based on comparative advantage, the total number of peppers and apples would change by how much?
Q: Suppose a world with two persons and two goods. Is the following statement True, False, Both (True…
A: The objective of the question is to determine whether each person in a two-person, two-goods world…
Q: Explain why it is possible for a country to have an absolute advantage in all goods, and yet it is…
A: The absolute advantage is the ability of an economy to produce commodities more efficiently than its…
Q: In the no specialization-no trade case, country X produces and consumes 60 units of good A and 10…
A: What rate the commodities will be exchanged in the international trade it is given by classical…
Q: How do comparative advantage and absolute advantage differ? Absolute advantage means more can be…
A: International trade is the exchange of commodities and services among countries throughout the…
Q: Assume that country A can use its resources to produce 320 computers or 320,000 books, while country…
A: Since you have posted a question with multiple sub parts, we will solve first three subparts for…
Q: Suppose that Candonia and Lamponia agree to trade. Each country focuses its resources on producing…
A: Opportunity cost shows the cost of producing one good in terms of other. Opportunity cost shows the…
Q: Jefferson Franklin 1 wheat 1/2 cotton The table above shows the number of hours required to produce…
A: Opportunity cost refers to the value relinquished when opting for one choice over another, capturing…
Q: Elliot and Jordy find themselves on a deserted island. The only two activities available are fishing…
A: Comparative advantage is an individual's ability to produce a particular good or service at lower…
Q: Suppose there exist two imaginary countries, Denali and Congaree. Their labor forces are each…
A: Opportunity Cost refers to the value of a consumer's foregone activity such as the consumption of a…
Q: Suppose Morgan can produce 50 pizzas or 200 beers in a day and Jack can produce 10 pizzas or 100…
A: An individual has the comparative advantage if it can produce a good at lower opportunity cost than…
Q: The countries USA and China produce computers and rice using only labor as an input. Available Labor…
A: Production possibility curve shows the combination of two goods that can be produced with the given…
Q: Y 100 Country A X Y 40 Country B 40 X 20 a) How much of Good Y will Country B produce if they…
A: Opportunity cost is value of next best alternative use of resources. In our context, opportunity…
Q: Assume our standard model. Andreas can knit 4 scarves per hour and 3 hats per hour. Katya can knit…
A: Given: In an hour, Andreas can knit 4 scarves and 3 hats. Katya can knit 12 scarves and 6 hats.
Q: Jared takes 10 minutes to wash dishes and 20 minutes to write a paper. Jason takes 10 minutes to…
A: In a financial model, specialists enjoy a comparative upper hand over others in creating a specific…
Q: In one hour, Sue can produce 90 caps or 6 jackets, and Tessa can produce 20 caps or 4 jackets. Thus,…
A: In one hour, Sue can produce 90 caps or 6 jackets Sue's opportunity cost of producing caps in terms…
Q: Suppose that Portugal and Switzerland both produce jeans and stained glass. Portugal's opportunity…
A: Given information:There are two countries, i.e., Country P and Country SThey produce two goods,…
Q: Debra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies…
A: ‘Comparative advantage’ refers to the ability to produce a good at a lesser ‘opportunity cost’ than…
Q: United States Hamburgers (in tons) Mexico Hamburgers (in tons) Tacos (in tons) 180 120 60 Tacos (in…
A: Comparative advantage is an economy's ability to produce a particular good or service at a lower…
Q: Suppose that Portugal and Switzerland both produce beer and stained glass. Portugal's opportunity…
A: The countries involve in trade. Trade is very beneficial for all countries. It improves the market.…
Q: The U.S. and Mexico both produce vehicles and tons of plastic, which are sold for the same price in…
A: The opportunity cost represents the potential benefits that one has to give up while choosing an…
Q: Specialization and trade When a country has a comparative advantage in the production of a good, it…
A: Production possibility curve is a graphical representation that shows various combinations of two…
Q: Who has the absolute advantage in making pizzas and who has the absolute advantage in making…
A: A country has an absolute advantage in production a good when he can producer that good more…
Q: Tina can allocate her 8-hour day between baking and cooking. Each hour devoted to baking yields 2…
A: First, we determine the output table which shows the maximum amount of cake and plates of food can…
Q: Once again, consider Babs and Donna, who can each produce cake, beer, or some combination of the two…
A: Comparative cost advantage: - it is a principle of international trade given by David Ricardo which…
Q: In the past, comparative advantages have sometimes shifted from one nation to another. What factors…
A: The concept of comparative advantage introduced by economist David Ricardo, forms the backbone of…
Q: What is Comparative Advantage and how is it determined? Explain this concept in words.
A: Theory of comparative advantage in international trade helps trading countries in specialization and…
Q: lease draw the two graphs with explanation, thank you Suppose that in the country of England, two…
A: International trade is a branch of economics that deals with the exchange of goods, capital flows…
Q: When two countries decide to specialize and exchange, both countries will be able to consume a. at…
A: The decision to specialization and engages in trade by two countries would better off both of them…
Q: Amy and Bill are fixing up their house by painting walls and installing electrical outlets. In one…
A: A country is said to have an absolute advantage in the production of a good when it can produce a…
Q: Country X and Country Y are neighbours. Both Country X and Country Y can produce two goods: food and…
A: In international trade theory, countries specialize and engage in trade to produce at a point which…
Q: Suppose there are two countries: Korea and Japan. These countries can each produce two goods; TV and…
A: There are two countries with different marginal productivity for Tv and pens
Q: Consider two individuals, Fred and Barney. In one hour, Fred can produceeither 15 gallons of beer,…
A: Meaning of Production Possibility Frontier: The term production possibility frontier refers to the…
Q: Is the following statement true or false? Please explain. "Everyone has a comparative advantage."
A: The flow of goods and services across borders is known as the international trade. The economist…
Q: part C and D needed only Consider the Production Possibility Frontiers of two countries,…
A: The act of purchasing, selling, or exchanging products or services between individuals, companies,…
Q: a)Identify an example of absolute advantage relative to the United States from your data tables. Be…
A: (a) The U.S take a shorter time to produce the products like corn, citrus, apparel, and computer…
Q: Suppose that an hour of work in Germany can produce 5 pastries or 4 sausages. In Denmark, an hour of…
A: Hey, Thank you for the question. According to our policy, we can only answer 3 subparts per…
Q: Suppose that country A using one unit of labor can produce 80 pounds of apples or 20 pounds of…
A: When manufacturing a specific good, agents in an economic model have a comparative advantage over…
Q: Suppose there are two bakers in town: Sarah and Amy. Sarah can bake 4 loaves of bread or 8 pies in…
A: In microeconomic theory, opportunity cost is the loss of the benefit that could have been enjoyed if…
Q: When countries specialize based on their comparative advantage and trade with each other, how does…
A: Gains of trade happens when countries trade with one another and trade on goods which they…
Q: Consider 2 countries (the United States and the France) that use input such as labor to produce 2…
A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…
Q: Suppose the economy initially produces 12 million gallons of drinking water and 500 million tons of…
A: Opportunity cost shows the cost of one good in terms of other. It shows the forgone units of one…
Q: Suppose that a tailor in Cottonland can sew either 40 cotton shirts or 10 silk shirts per week, and…
A: 2.1. Given: A tailor in Cottonland can sew 40 cotton shirts while a tailor in Silkland can sew 18…
Q: Debra can make either 12 cakes or 16 cookies in 4 hours. Sam can make either 6 cakes or 12 cookies…
A: Opportunity cost is the forgone profit that the producer would have gained, it the second best…
Q: 2.1) Which country has the comparative advantage of cloth and in machines? Show your calculations.
A: In this case, we have to discuss the term comparative advantage. Comparative advantage actually…
Currently Bob is producing 8 apples and 9 peppers, while John is producing 3 apples and 3 peppers. If they instead specialized based on
Step by step
Solved in 3 steps with 7 images
- Keep the Highest / 1 4. Shifts in production possibilities Suppose Spain produces two types of goods: agricultural and capital. The following diagram shows its current production possibilities frontier for alfalfa, an agricultural good, and locomotives, a capital good. Drag the production possibilities frontier (PPF) on the graph to show the effects of a breakout of avian flu that sickens millions of workers. Note: Select either end of the curve on the graph to make the endpoints appear. Then drag one or both endpoints to the desired position. Points will snap into position, so if you try to move a point and it snaps back to its original position, just drag it a little farther. 420 350 PPF 280 210 140 70 PPF 40 80 120 160 200 240 ALFALFA (Millions of bushels) LOCOMOTIVES (Tho us ands).country, X has a comparative advantage in producing game console. Suppose recently, the Education Department of Country X has banned all her residents from playing video games with game consoles. One Key-Opinion Leader (KOL) claims that “Since we don’t need game consoles anymore, we should stop producing game console at all. We should put the resources in producing wheat instead”. Given your above answers, explain whether you agree with the claim of the KOL.Suppose that Patrick Mahomes can pass for 28 touchdowns per season or run for 14 touchdowns per season and Josh Allen can pass for 45 touchdowns per season or run for 15 touchdowns per season. Which of the following statements is true? Patrick Mahomes has an opportunity cost of passing TDs equal to 2 running TDs and a comparative advantage in passing TDs. Patrick Mahomes has an opportunity cost of passing TDs equal to ½ of a running TD and a comparative advantage in running TDs. Patrick Mahomes has an opportunity cost of passing TDs equal to 2 running TDs and a comparative advantage in running TDs. O Patrick Mahomes has an opportunity cost of passing TDs equal to ½ of a running TD and a comparative advantage in passing TDs.
- Isabella and Antonio are auto mechanics. Isabella takes 4 hours to replace a clutch and 2 hours to replace a set of brakes. Antonio takes 6 hours to replace a clutch and 2 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage. Instructions: Enter your responses rounded to two decimal places. The opportunity cost of replacing a set of brakes for Isabella is of a clutch replacement. The opportunity cost of replacing a set of brakes for Antonio is of a clutch replacement. has a comparative advantage in brake replacement. has a comparative advantage in clutch replacement. has an absolute advantage in brake replacement. has an absolute advantage in clutch replacement.When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Freedonia and Lamponia. Both countries produce potatoes and tea, each initially (i.e., before specialization and trade) producing 6 million pounds of potatoes and 3 million pounds of tea, as indicated by the grey stars marked with the letter A. Suppose that Freedonia and Lamponia 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 2 million pounds of potatoes for 2 million pounds of tea. This ratio of goods is known as the price of trade between Freedonia and Lamponia. The following graph shows the same PPF for Freedonia as before, as well as its…Taylor and Bobby are auto mechanics. Taylor takes 12 hours to replace an engine and 4 hours to replace a set of brakes. Bobby takes 8 hours to replace an engine and 4 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage.
- Consider the combined production possibility frontier for a two good (fish and apples), two-person (Dianne and Rachel) economy shown in the graph above. It is known that Dianne has a comparative advantage in fish production. Based on this information, identify whether each of the following would be true or false and briefly explain your reasoning. Dianne has an absolute advantage in both fish and apple production. The marginal cost of fish production for Dianne is 1 apple. The marginal cost of apple production for Rachel is 2 fish.10)Suppose that in a three-hour block of time you can either make 2 batches of chocolate chip cookies or word-process 10 pages of text. In contrast, your roommate Keshawn can either make 4 batches of cookies or word-process 5 pages of text in a three-hour block of time. Which of the following is correct * a)Your comparative advantage is in making cookies. b)None of the above c)Keshawn's comparative advantage is in word-processing text. d)Your comparative advantage is in word-processing text.Suppose that Bob and Jimmy both have 10 hours of time that they can use to do one of two things: make pasta or make hamburgers. Bob can make 15 hamburgers in one hour and 3 plates of pasta in one hour. Jimmy can make 8 hamburgers in one hour and 2 plates of pasta in one hour. Who has comparative in the production of hamburgers? Who has comparative advantage in the production of pasta? If Bob and Jimmy trade, who should specialize in producing hamburgers and who should specialize in producing pancakes? Give an example of terms of trade at which mutually beneficial trade would be possible between Bob and Jimmy.
- Jason and Holly produce lollipops and chocolates. Their production possibilities are given by the following functions: Jason: Q = 140 - 10QC %3D Holly: Q = 110 - 5Qc !! Before they trade, Jason is producing and consuming 60 lollipops and 8 chocolates. Before they trade, Holly is producing and consuming 55 lollipops and 11 chocolates. Then they decide to specialize and trade based on comparative advantage. They agree to trade 66 lollipops for 9 chocolates. How many MORE lollipops will Jason have with trade compared to without trade? Answer:Isabella and Antonio are auto mechanics. Isabella takes 8 hours to replace a clutch and 6 hours to replace a set of brakes. Antonio takes 4 hours to replace a clutch and 2 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage. Instructions: Enter your responses rounded to two decimal places. The opportunity cost of replacing a set of brakes for Isabella is The opportunity cost of replacing a set of brakes for Antonio is has a comparative advantage in brake replacement. has a comparative advantage in clutch replacement. has an absolute advantage in brake replacement. has an absolute advantage in clutch replacement. Antonio Isabella Antonio AntonioWhich of the following is not true about the differences between comparative advantage and absolute advantages? While it is possible to achieve gains from trade if the country does not have a comparative advantage in the production of any goods, it is not possible to achieve gains from trade if the country does not have an absolute advantage in the production of any goods. Comparative advantage emphasizes the relative cost differences based on opportunity costs, while absolute advantage emphasizes absolute costs. In order to achieve gains from trade, specialization should be based on comparative advantage and not absolute advantage. In the two nation, two good model, we will always see that a country will have a comparative advantage in at least one good.
