Can you help me answer the last blank sentences The US has the absolute advantage in producing steel and cornMexicohas a comparative advantage in producing corn.Canadahas a comparative advantage in producing steel.Consider the joint production possibility frontier (PPF) below representing the above situation.The graph is not drawn to scale.ComSteelWhat are the values marked on the axes?A =1600bushels of cornB = 1500bushels of cornC =500bushels of cornD =700tons of steelE =1700tons of steelF =1800tons of steelProducing 1000 bushels of corn and 900 tons of steel isfeasibleandefficientSuppose the total production is 1200 bushels of corn and 1000 tons of steel. Then,the US is producingbushels of corn andtons of steel,Mexico is producingbushels of corn andtons of steel,Canada is producingbushels of corn andtons of steel.Please answer all parts of the question. The US, Mexico, and Canada all produce steel and corn. The table below shows the total production for each good if the country specialized in that good. The units for the opportunitycost of producing corn will be tons of steel per bushel of corn Fill in the opportunity cost of producing corn (just the value, no units) for each country in the table below. (Includetwo decimal places.)Country SteelCornOC of cornUS1000 tons 1000 bushels1Mexico100 tons500 bushels0.2Canada700 tons100 bushelsThe US has the absolute advantage in producing steel and cornMexico수has a comparative advantage in producing corn.Canadahas a comparative advantage in producing steel.수Consider the joint production possibility frontier (PPF) below representing the above situation.The graph is not drawn to scale.ComFSteelWhat are the values marked on the axes?A =1600bushels of cornB =1500bushels of cornC = 500bushels of cornD =700tons of steelE =1700tons of steelF =1800tons of steel

Opportunity cost is the cost incurred when one good has to be given up for the production of another good. The country that can produce a good with a lower opportunity cost will have a comparative advantage in that good. The country that will have a comparative advantage in a good, will specialize and produce only that good and engage in trade. If a country produces both the goods in higher amounts than the other countries, then that country is said to have an absolute advantage over both the goods.The US has an absolute advantage in steel and corn both, Mexico has a comparative advantage in producing corn and Canada has an absolute advantage in producing steel. Now, the opportunity cost of corn for the US is 1, for Mexico is 0.2 and for Canada is 7, and the opportunity cost of steel for the US is 1, for Mexico is 5 and for Canada is 0.14. From this, we can say that Mexico and US will produce corn, and US and Canada will produce steel. Due to specialization, Mexico will produce only corn and no steel and Canada will produce only steel and no corn whereas, the US produces both as it has an absolute advantage in both the goods. For corn, Mexico has the lowest opportunity cost, so it will produce the maximum amount of corn that it can achieve with its resources, the rest will be produced by the US. For steel, Canada has the least opportunity cost and will produce its maximum production level of steel with its resources, the rest will be produced by the country with the second-lowest opportunity cost in steel, that is the US. Given that 1200 bushels of corn and 1000 tons of steel is to be produced, Mexico will produce 500 bushels of corn and the rest 700 bushels will be produced by the US. Canada will produce 700 tons of steel and the remaining 300 tons will be produced by the US. Therefore, the first blank will be 700 bushels of corn and 300 tons of steel, second blank will be 500bushels of corn and no steel, and third blank will be no corn and 700tons of steel.

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Economics

Suppose the total production is 1200 bushels of corn and 1000 tons of steel. Then, • the US is producing bushels of corn and tons of steel, • Mexico is producing bushels of corn and tons of steel, • Canada is producing bushels of corn and tons of steel.

Suppose the total production is 1200 bushels of corn and 1000 tons of steel. Then, • the US is producing bushels of corn and tons of steel, • Mexico is producing bushels of corn and tons of steel, • Canada is producing bushels of corn and tons of steel.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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