Use the following assumptions to solve this assignment: 1. There are three countries - Argentina, Britain and Canada. 2. Each country produces and consumes two kinds of goods- crude oil and beef. 3. All countries make their goods from a single type of input - labor - and each country has 60 hours of labor available to produce crude oil and beef. 4. Each country demands 2 barrels of crude oil. This assumption simply means that a country must have exactly 2 barrels of crude oil - it may produce them domestically, it may import them from abroad, or it makes some domestically and imports the rest. 5. Countries produce goods using the technology described in the table below: Technology Hours of labor needed to produce one unit of good Argentina Britain Canada barrel of crude oil pound of beef 20 30 12 2 10 Using the above assumptions, answer the following questions: 1. Calculate the quantities of crude oil and beef produced in each country in autarky (when they do not trade and each country produces its own crude oil and beef) Total Quantities produced Argentina Britain Canada Autarky barrel of crude oil (No trade) pound of beef 2. Order the countries according to their absolute advantage in production of crude oil
Use the following assumptions to solve this assignment: 1. There are three countries - Argentina, Britain and Canada. 2. Each country produces and consumes two kinds of goods- crude oil and beef. 3. All countries make their goods from a single type of input - labor - and each country has 60 hours of labor available to produce crude oil and beef. 4. Each country demands 2 barrels of crude oil. This assumption simply means that a country must have exactly 2 barrels of crude oil - it may produce them domestically, it may import them from abroad, or it makes some domestically and imports the rest. 5. Countries produce goods using the technology described in the table below: Technology Hours of labor needed to produce one unit of good Argentina Britain Canada barrel of crude oil pound of beef 20 30 12 2 10 Using the above assumptions, answer the following questions: 1. Calculate the quantities of crude oil and beef produced in each country in autarky (when they do not trade and each country produces its own crude oil and beef) Total Quantities produced Argentina Britain Canada Autarky barrel of crude oil (No trade) pound of beef 2. Order the countries according to their absolute advantage in production of crude oil
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
Problem 10RQ: What factors does Paul Krugman identity that supported expanding international trade in the 1800s?
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NOTE: Please answer option 4 to 7.
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