Production DataCountry of Joem - Production PossibilitiesCorn (tons)Sugar (tons)2 34 2081Corn (tons)Sugar (tons)6Country of Annia - Production PossibilitiesCorn (tons)1 2 3Sugar (tons)4016 12 8Preferred Bundle without tradeJoem24Annia284040SCENARIO:You work for a consulting firm that advises countries on tradepolicy. The countries of Joem and Annia both produce cornand sugar. You have been asked to analyze the opportunitycosts and comparative advantages to recommend an efficienttrading relationship. Consider the production data provided.Prepare a brief report that:1. Calculate and compare the opportunity costs of producing 1 unitof corn and 1 unit of sugar in each country. Which country hasthe lower opportunity cost for each good?2.Determine which good each country has a comparativeadvantage in producing sugar and which one has a comparativeadvantage in producing corn. Explain your analysis.3. Recommend a trading relationship that allows the countries tospecialize based on comparative advantage. How would tradeimprove economic efficiency?4.Think about your own interests, skills, and opportunities. In whatareas do you potentially have a comparative advantage over yourpeers or co-workers? Are there goods or services you couldprovide to others more efficiently? How could you maximize youradvantages to achieve positive gains from trade in your dailyexchanges and relationships?

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Answered: Production Data Country of Joem -…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Production Data
Country of Joem - Production Possibilities
Corn (tons)
Sugar (tons)
2 3
4 2
0
8
1
Corn (tons)
Sugar (tons)
6
Country of Annia - Production Possibilities
Corn (tons)
1 2 3
Sugar (tons)
4
0
16 12 8
Preferred Bundle without trade
Joem
2
4
Annia
2
8
4
0
4
0
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 countries to
specialize based on comparative advantage. How would trade
improve economic efficiency?
4.
Think about your own interests, skills, and opportunities. In what
areas do you potentially have a comparative advantage over your
peers or co-workers? Are there goods or services you could
provide to others more efficiently? How could you maximize your
advantages to achieve positive gains from trade in your daily
exchanges and relationships?

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