In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. a. Who has the absolute advantage in the production of rubber or radios? How can you tell? b. Calculate the opportunity cost of producing 80 additionalradiosinJapanandinMalaysia.(Your calculationmayinvolvefractions,whichisfine.) Which country has a comparative advantage in the production of radios? c. Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? d. In this example, does each country have an absoluteadvantageandacomparativeadvantage in the same good? e. InwhatproductshouldJapanspecialize?Inwhat product should Malaysia specialize?
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.
a. Who has the
b. Calculate the
c. Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber?
d. In this example, does each country have an absoluteadvantageandacomparativeadvantage in the same good?
e. InwhatproductshouldJapanspecialize?Inwhat product should Malaysia specialize?
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