1. One German worker can produce either 5 cars or 10 tons of grain a year. OneJapanese worker can produce either 4 cars or 5 tons of grain a year. To keep thingssimple, assume that each country has 100 million workers.Japanwell as the PPE Lpportunity cost of producon of gram? Show your work.d) In Japan, what is the opportunity cost of producing a car? a ton of grain? Showyour work.e) Given all the information above, which country has an absolute advantage inproducing cars? Which country has an absolute advantage in producing grain.Why?f) Given all the information above, which country has a comparative advantagein producing cars? Which country has a comparative advantage in producinggrain? Why?g) Both countries will spend half of each country's workers produce cars and halfproduce grain. Complete the following table with the quantities of carsproduced and consumed in each country if there is no trade.Car Produced andConsumed (million)Tons of Grain Producedand Consumed (million)GermanyJapanh) If each country only produces the good in which they have a comparativeadvantage and then traded 300 million tons of grain for 200 million cars, willboth countries be better off? Why?

Following is the given information: Workers in each country = 100 million In German, either 5 cars…

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. the follow

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. the follow

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 L
pportunity cost of produc
on of gram? Show your work.
d) In Japan, what is the opportunity cost of producing a car? a ton of grain? Show
your work.
e) Given all the information above, which country has an absolute advantage in
producing cars? Which country has an absolute advantage in producing grain.
Why?
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?

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