The two countries involved in trading are Canada and the U.S. and the two products are donuts and sweatshirts. Suppose that the Canadian worker can produce 500 donuts or 10 sweatshirts per hour. Suppose the U.S. worker can produce 400 donuts or 20 sweatshirts per hour. What country has the absolute advantage for donuts? (1 pt) What country has the absolute advantage for sweatshirts? (1 pt) What country has the comparative advantage for donuts? (1 pt) What country has the comparative advantage for sweatshirts? (1 pt) If Canada and the U.S. trade in these goods, what product will Canada ship to the U.S.? Explain your answer. (3 pts) If the U.S. workers only produced 10 sweatshirts per hour, would the U.S. still gain from trade? Explain your answer. (3 pts) Put your answers on a piece of paper with the answers labeled with the question number. All answers must be legible for credit. Scan your paper and submit to this assignment
The two countries involved in trading are Canada and the U.S. and the two products are donuts and sweatshirts. Suppose that the Canadian worker can produce 500 donuts or 10 sweatshirts per hour. Suppose the U.S. worker can produce 400 donuts or 20 sweatshirts per hour. What country has the absolute advantage for donuts? (1 pt) What country has the absolute advantage for sweatshirts? (1 pt) What country has the comparative advantage for donuts? (1 pt) What country has the comparative advantage for sweatshirts? (1 pt) If Canada and the U.S. trade in these goods, what product will Canada ship to the U.S.? Explain your answer. (3 pts) If the U.S. workers only produced 10 sweatshirts per hour, would the U.S. still gain from trade? Explain your answer. (3 pts) Put your answers on a piece of paper with the answers labeled with the question number. All answers must be legible for credit. Scan your paper and submit to this assignment
Chapter34: World Trade Equilibrium
Section: Chapter Questions
Problem 9E
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Transcribed Image Text:The two countries involved in trading are Canada and the U.S. and the two products are donuts and sweatshirts.
Suppose that the Canadian worker can produce 500 donuts or 10 sweatshirts per hour. Suppose the U.S. worker can
produce 400 donuts or 20 sweatshirts per hour.
What country has the absolute advantage for donuts? (1 pt)
What country has the absolute advantage for sweatshirts? (1 pt)
What country has the comparative advantage for donuts? (1 pt)
What country has the comparative advantage for sweatshirts? (1 pt)
If Canada and the U.S. trade in these goods, what product will Canada ship to the U.S.? Explain your answer. (3 pts)
If the U.S. workers only produced 10 sweatshirts per hour, would the U.S. still gain from trade? Explain your answer. (3
pts)
Put your answers on a piece of paper with the answers labeled with the question number. All answers must be legible for
credit. Scan your paper and submit to this assignment
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