Hours of work necessary to produce one unit of cloth or wine is shown in the following table: Cloth 100 90 England Portugal Who has the absolute advantage in cloth, and who has the absolute advantage in wine? O England, England O England, Portugal O Portugal, Portugal O Portugal, England Wine 120 80

Hours of work necessary to produce one unit of cloth or wine is shown in the following table: Cloth 100 90 England Portugal Who has the absolute advantage in cloth, and who has the absolute advantage in wine? O England, England O England, Portugal O Portugal, Portugal O Portugal, England Wine 120 80

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q.1
The countries of Nickeltown and Lykesville each produce two goods: Ovens and Dishwashers. 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 Ovens Production of Dishwashers Nickeltown 105 Lykesville 147 What is the opportunity cost of producing 1 Ovens in Nickeltown Dishwashers 70 42 What is the opportunity cost of producing 1 Ovens in Lykesville Dishwashers ONickeltown OLykesville ONot enough information Which country has a comparative advantage in producing Ovens?
1. The following figures represent the amount that can be produced with a fixed amount of factor inputs. Sugar (tons) Cars Cuba 40 10 Mexico 50 100 1. Which country has an absolute advantage in sugar? Mexico 2. Which country has an absolute advantage in cars? 3. What is Cuba’s opportunity cost for producing one car? 4. Which country has a comparative advantage in cars? 5. Which country has a comparative advantage in sugar? 6. For both countries to benefit from trade, how much sugar can be traded for each car? 1 Car for “X” Sugar 1. The following figures represent the amount that can be produced with a fixed amount of factor inputs.
21. According to David Ricardo, O A. If countries specialize where they have a comparative advantage and trade, all groups in their economies will benefit equaly OB. If countries specialize where they have a comparative advantage and trade, their efficiency and standard of living can improve O C. If countries specialize where they have an absolute advantage and trade, their efficiency and standard of living can improve O D. Countries should strive to develop their absolute advantage to benefit from trade with other countries
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I don't understand the second part of this homework. If Frankie and Johnny completely specialize according to comparative advantage, what will happen to the amount of eggs and milk? I have the opportunity cost calculated to understand who should do what in this case. But what will I do to that number?
1. Gains from trade Consider two neighboring island countries called Dolorium and Contente. They each have 4 million labor hours available per week that they can use to produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor. Country Dolorium Contente Jeans Rye (Pairs per hour of labor) (Bushels per hour of labor) 20 16 Initially, suppose Contente uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Dolorium produces 15 million pairs of jeans and 20 million bushels of rye, and Contente produces 8 million pairs of jeans and 48 million bushels of rye. 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 rye it produces.…
2. Comparative and absolute advantage David and Morgan are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of zucchini and watermelon each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing zucchini or watermelon or to produce zucchini on some of the land and watermelon on the rest. David Morgan WATERMELON (Pounds) 180 162 On the following graph, use the blue line (circle symbol) to plot David's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Morgan's PPF. 144 126 108 90 72 54 36 1.8 0 Zucchini (Pounds per acre) 28 0 zucchini. 18 90 180 Watermelon (Pounds per acre) 7 6 270 360 450 540 630 720 810 900 ZUCCHINI (Pounds) David's opportunity cost of producing 1 pound of watermelon is pound of watermelon is David's PPF Morgan's PPF has an absolute advantage in the production of zucchini, and has an absolute advantage in the production of watermelon. pounds of…
7. What is the law of comparative advantage? According to the law of comparative advantage, what should be the distin- guishing characteristics of the goods a nation produces? What should be the distinguishing characteristics of the goods a na- tion imports? How will international trade influence people's production levels and living standards? Explain. 15
Microchips 90 U.S. PPF Which country has comparative advantage in the production of Microchips? Which country has comparative advantage in the production of Brooms? Which country has absolute advantage in the production of Microchips? Which country has absolute advantage in the production of Brooms? Microchips Brooms [Choose ] [Choose ] [Choose ] [Choose ] 10 MEXICO PPF Brooms