the opportunity cost of producing cheese in the two countries, you can tell that cheese and has a comparative advantage in the production of oil. has a comparative advantage in the France and Germany consider trading cheese and oil with each other. France can gain from specialization and trade as long as it receives of oil for each pound of cheese it exports to Germany. Similarly, Germany can gain from trade as long as it receives more of cheese for each barrel of oil it exports to France. answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Germany gain from trade? Check all that apply.

the opportunity cost of producing cheese in the two countries, you can tell that cheese and has a comparative advantage in the production of oil. has a comparative advantage in the France and Germany consider trading cheese and oil with each other. France can gain from specialization and trade as long as it receives of oil for each pound of cheese it exports to Germany. Similarly, Germany can gain from trade as long as it receives more of cheese for each barrel of oil it exports to France. answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Germany gain from trade? Check all that apply.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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Similar questions

True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
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?
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?
How does comparative advantage lead to gains from trade?
Is it possible to have a comparative advantage in the production of a good but not to have an absolute advantage? Explain.
Table 33.15 shows how the average costs of production for semiconductors (the chips In computer memories) change as the quantity of semiconductors built at that factory increases. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.
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?
Does intra-industry trade contradict the theory of comparative advantage?