Table: Production Possibilities for the United States and Canada U.S. Production Possibilities One Possibility Another Possibility Quantity of Cars (millions) Quantity of Lumber (millions of board feet) 10 10 Canada Production Possibilities One Possibility Another Possibility Quantity of Cars (millions) Quantity of Lumber (millions of board feet) 2 12 (Table: Production Possibilities for the United States and Canada) Use Table: Production Possibilities for the United States and Canada. has/have an absolute advantage in producing cars. O The United States Both the United States and Canada Canada

Table: Production Possibilities for the United States and Canada U.S. Production Possibilities One Possibility Another Possibility Quantity of Cars (millions) Quantity of Lumber (millions of board feet) 10 10 Canada Production Possibilities One Possibility Another Possibility Quantity of Cars (millions) Quantity of Lumber (millions of board feet) 2 12 (Table: Production Possibilities for the United States and Canada) Use Table: Production Possibilities for the United States and Canada. has/have an absolute advantage in producing cars. O The United States Both the United States and Canada Canada

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. The price of trade Suppose that Poland and Wales both produce alive oil and shoes. Poland's opportunity cost of producing a pair of shoes is 5 crates of olive oil while Wales's opportunity cost of producing a pair of shoes is 11 crates of olive oil. By comparing the opportunity cost of producing shoes in the two countries, you can tell that Poland production of shoes and Wales has a comparative advantage in the production of olive oil. has a comparative advantage in the Suppose that Poland and Wales consider trading shoes and olive oil with each other. Poland can gain from specialization and trade as long as it receives more than 5 crates of olive oil for each pair of shoes it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than 11 pairs of shoes for each crate of olive oil it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of olive oil) would allow both Wales…
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Refer to Table 19.1. Guatemala has Group of answer choices a comparative advantage in orange production. an absolute advantage in orange production. a comparative advantage in banana production. an absolute advantage in banana production.
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Production Data Country of Joem - Production Possibilities Corn (tons) Sugar (tons) 01 2 3 4 8 6 4 2 0 Country of Annia - Production Possibilities Corn (tons) Sugar (tons) 0 1 2 3 4 16 12 8 4 0 Preferred Bundle without trade Joem Annia Corn (tons) 2 2 Sugar (tons) 4 8 SCENARIO: You work for a consulting firm that advises countries on trade policy. The countries of Joem and Annia both produce corn and sugar. You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 1. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the…
QUESTION 3 (Figure: The Production Possibilities for Taiwan and Japan) Use Figure: The Production Possibilities for Taiwan and Japan. Taiwan has a comparative advantage in producing. while Japan has a comparative advantage in producing. Quantity of microchips 1,600 1,200 1000 600 400 200 Talwan rain boots; microchips 800 1,200 Quantity of rain boots Quantity of microchips 1,400 Oª O b. both microchips and rain boots; neither good Oo microchips; rain boots i Od. neither good; both microchips and rain boots 1,200 1,000 800 400 400 200 400 Japan 100 1,00 Quantity of rain boots