Suppose that there are only two countries (the United States and Mexico) and only two goods ( Automobiles and Corn). In the U.S., it takes 120 labor hours to produce a car and 15 labor hours to produce a bushel of corn. In Mexico, it takes 200 labor hours to produce a car and 30 labor hours to produce a bushel of corn. Ignoring tariffs, taxes, the repeal of USMCA, or the Border Wall, which countries should be exporting which good?

Suppose that there are only two countries (the United States and Mexico) and only two goods ( Automobiles and Corn). In the U.S., it takes 120 labor hours to produce a car and 15 labor hours to produce a bushel of corn. In Mexico, it takes 200 labor hours to produce a car and 30 labor hours to produce a bushel of corn. Ignoring tariffs, taxes, the repeal of USMCA, or the Border Wall, which countries should be exporting which good?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 7PA

See similar textbooks

Similar questions

You just overheard your friend say the following: Poor countries like Malawi have no absolute advantages. They have poor soil, low investments in formal education and hence low-skill workers, no capital, and no natural resources to speak of. Because they have no advantage, they cannot benefit from trade. How would you respond?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?
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. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? 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? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
In Germany it takes three workers to make one television and four workers to make one video camera. In Poland It takes six workers to make one television and 12 workers to make one video camera. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the production of video cameras? How can you tell? Calculate the opportunity cost of producing one additional television set in Germany and In Poland. (Your calculation may involve fractions, which Is tine.) Which country has a comparative advantage in the production of televisions? Calculate the opportunity cost of producing one video camera in Germany and in Poland. Which country has a comparative advantage in the production of video cameras? In this example, is absolute advantage the same as comparative advantage, or not? In what product should Germany specialize? In what product should Poland specialize?
Why might Belgium, France, Italy, and Sweden have a higher export to GDP ratio than the United States?
If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
Imagine that it takes an average Australian miner 10 hours to mine a metric ton of coal and 20 hours to mine a metric ton of manganese. It takes the average South African miner 4 hours to mine a metric ton of coal and 12 hours to mine metric ton of manganese.Create a table to show how productive each miner is in a day. a. In what task does each miner have a comparative advantage? b. Which resource will each country import? How about export? c. Explain how markets provide the opportunity for the mining companies to specialize and earn gains from trade.
nave a n ab je in bothi good because they both produce boots and shirts. 40- 38- 36- B. Neither country has an absolute advantage in both goods because the United States can produce more boots but Canada can produce more shirts. 34- 32- 30- 28- 26- 24- 22- 20- 18- 16- 14- 12- 10- 8- C. The United States has an absolute advantage in both goods because it can produce more boots and more shirts. PPFUS. D. Neither country has an absolute advantage in both goods because Canada can produce more boots but the United States can produce more shirts. O E. Canada has an absolute advantage in both goods because it can produce more boots and more shirts. US 6- Suppose initially that the United States is consuming 4 boots and 8 shirts and Canada is consuming 18 boots and 2 shirts, as indicated in the figure. Then, suppose the United States and Canada specialize by each only producing the good for which they have a comparative advantage and then trade. In particular, suppose the United States trades…
Pls help with this homework.
An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes.a. Who has the absolute advantage in coffee? Explain.b. Who has the comparative advantage in cof-fee? Explain.c. If the two countries specialize and trade with each other, who will import coffee? Explain.d. Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.
Please As soon as possible . thank you
Hello please provide homeowrk help with the following usung the image provided. Thank you.1. What is the opportunity cost of one more unit of Lumber in Country B and who has the comparative advantage in Wheat production? 2. What country has the comparative advantage in Lumber production? 3. What is the acceptable term of trade for which both countries will gain from trade?