Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) Tacos (in tons) Hamburgers (in tons) Tacos (in tons) 3636 3030 2020 2424 44 2020 4040 1212 88 1010 6060 1212 Which country has an absolute advantage in producingtacos? The United States Which country has a comparative advantage in producingtacos? Mexico Suppose the United States is currentiy oroducing 4040 tons of hamburgers and 1212 tons of tacos and Mexico is currentiy producing 88 tons of hamburgers and 1010 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of nothing additional tonis) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) Tacos (in tons) Hamburgers (in tons) Tacos (in tons) 3636 3030 2020 2424 44 2020 4040 1212 88 1010 6060 1212 Which country has an absolute advantage in producingtacos? The United States Which country has a comparative advantage in producingtacos? Mexico Suppose the United States is currentiy oroducing 4040 tons of hamburgers and 1212 tons of tacos and Mexico is currentiy producing 88 tons of hamburgers and 1010 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of nothing additional tonis) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Is absolute advantage or comparative advantage more important for trade? Give an Example
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K Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) 0 40 80 120 Which country has an absolute advantage in producing tacos? Mexico Tacos (in tons) 108 72 36 0 Hamburgers (in tons) 0 8 16 24 Tacos (in tons) 60 40 20 Which country has a comparative advantage in producing tacos? The United States Suppose the United States is currently producing 80 tons of hamburgers and 36 tons of tacos and Mexico is currently producing 16 tons of hamburgers and 20 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer) and a total of additional ton(s) of tacos can be produced.
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The United States imports televisions from Japan and Japan imports computer chips from the United States. If the theory of comparative advantage guides trade between the two countries, it must be true that Group of answer choices the United States has comparative advantage in producing computer chips. the United States has comparative advantage in producing televisions. the opportunity cost of producing computer chips in the United States is higher than that in Japan. the opportunity cost of producing televisions in Japan is higher than that in the United States.
The following graph shows a fictional world economy that consists of only two countries, Greenberg and Baxton. Both countries produce airplanes under increasing-cost conditions. Note that the left-hand part of the diagram is a mirror image of a standard supply-demand diagram, and therefore the supply and demand curves slope in directions opposite their usual directions. Greenberg Baxton 30 27 24 +18 + + 15 12 In the absence of trade (that is, autarky), the equilibrium price in Greenberg is $ and the equilibrium price in Baxton is |. (Hint: Enter all monetary values in full. For example, $7,000 rather than $7.) In the absence of trade, which of the following statements is correct? O Greenberg has the comparative advantage in production of airplanes. O Greenberg and Baxton are equally good at producing airplanes. O Baxton has the comparative advantage in production of airplanes. Now suppose both countries open up to international trade with each other. For each country, use the previous…
When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Yosemite and Congares. Both countries produce corn and lentils, each initially (ie, before specialization and trade) producing 6 million pounds of corn and 3 million pounds of lentils, as indicated by the grey stars marked with the letter A. LENTILS (MEns of pounds 0 0 194 2 Yout 4 10 CORN (Mof pounds) 14 16 LENTILS (Mons of pounds 0 2 Yosemite has a comparative advantage in the production of production of comparative advantage. After specialization, the two countries can produce a total of comm. Conger L 10 12 COHN (Mof pounds) 14 16 (?) conn while Congaree has a comparative advantage in the -Suppose that Yosemite and Congaree specialize in the production…
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 rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Rye Jeans (Bushels per hour of labor) (Pairs per hour of labor) Dolorium 5 20 Contente 8 16 Initially, suppose Contente uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Dolorium produces 15 million bushels of rye and 20 million pairs of jeans, and Contente produces 8 million bushels of rye and 48 million pairs of jeans. 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 rye and jeans…
Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the absolute advantage in wine? a) Portugal b) England c) Both d) Neither e) Can't tell
According to the information in the table, which country should specialize in computer productions and which country should specialize in food production?
***Please look at the screenshot for graphs*** Fill in the charts below with values based on the two Production Possibilities Frontiers above. Motor Vehicle Production in the United States (in millions) Cars Trucks 0 4 0 Motor Vehicle Production in Mexico (in millions) Cars Trucks 0 2 0 Which country has the absolute advantage in producing cars? Which country has the absolute advantage in producing trucks? Which country has the comparative advantage in producing cars? Which country has the comparative advantage in producing trucks? Should these two countries trade? Why or Why not?
The concept of comparative advantage is used by both countries and companies. Use a two goods example and two countries or companies to explain the comparative advantage theory. Use this theory to justify if its worthwhile for countries or companies specialize.