When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than itstrading partner. Then the country will specialize in the production of this good and trade it for other goods.The following graphs show the production possibilities frontiers (PPFS) for Yosemite and Rainier. Both countries produce com and lentils, each Initially(l.e., before specialization and trade) producing 30 million pounds of corn and 15 million pounds of lentils, as indicated by the grey stars marked withthe letter A.LENTILS (Milions of pounds)80706050403020100807060805070Note: Dashed drop lines will automatically extend to both axes.4060305020401030 PPF02010000Yosemite has a comparative advantage in the production ofwhile Rainler has a comparative advantage in theproduction of. Suppose that Yosemite and Rainier specialize in the production of the goods in which each has acomparative advantage. After specialization, the two countries can produce a total ofmillion pounds oflentils.million pounds of corn and [0Suppose that Yosemite and Rainier agree to trade. Each country focuses its resources on producing only the good in which it has a comparativeadvantage. The countries decide to exchange 20 million pounds of corn for 20 million pounds of lentils. This ratio of goods is known as the price oftrade between Yosemite and Rainier.PPFOThe following graph shows the same PPF for Yosemite as before, as well as its initial consumption at point A. Place a black point (plus symbol) on thegraph to indicate Yosemite's consumption after trade.101020 30 40 50 60CORN (Millions of pounds)PPFYosemiteTrueO False102070Yosemite2030 40 50CORN (Millions of pounds)80Rainier60405030CORN (Millions of pounds)?7060The following graph shows the same PPF for Rainier as before, as well as its initial consumption at point A.LENTILS (Milions of pounds)8080707060As you did for Yosemite, place a black point (plus symbol) on the following graph to indicate Rainier's consumption after trade.50804030201000PPF1020 30 40 50 60CORN (Millions of pounds)Rainier+Consumption After Trade70(?)+Consumption After Trade80Ⓒ(?)True or False: Without engaging in International trade, Yosemite and Rainier would have been able to consume at the after-trade consumption bundles.(Hint: Base this question on the answers you previously entered on this page.)

The Comparative Advantage theory is an economic concept developed by David Ricardo that explains the…

When a country has a comparative advantage in the production of a good, It means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Yosemite and Rainier. Both countries produce com and lentils, each initially (l.e., before specialization and trade) producing 30 million pounds of corn and 15 million pounds of lentils, as indicated by the grey stars marked with the letter A. 80 T Yosemite 80 Rainier

When a country has a comparative advantage in the production of a good, It means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFS) for Yosemite and Rainier. Both countries produce com and lentils, each initially (l.e., before specialization and trade) producing 30 million pounds of corn and 15 million pounds of lentils, as indicated by the grey stars marked with the letter A. 80 T Yosemite 80 Rainier

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Candonia and Sylvania. Both countries produce lemons and coffee, each initially (i.e., before specialization and trade) producing 24 million pounds of lemons and 12 million pounds of coffee, as indicated by the grey stars marked with the letter A. Candonia has a comparative advantage in the production of , while Sylvania has a comparative advantage in the production of . Suppose that Candonia and Sylvania specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of lemons and million pounds of coffee. Suppose that Candonia and…
Assume that Germany has 1200 units of labor available and it can produce two goods: apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. France has a labor force of 800. Foreign's unit labor requirement in apple production is 5, while in banana production it is 1. a) Graph both countries' PPF. Clearly state which trade theory you are using and explain the reason. Note that the shape of the production possibility frontier depends on the theory. b) Show relative autarky price in Germany and France country. c) Which country has a comparative advantage in the production of apple? Why?
Question 27 . If Maxine and Daisy both specialized in the product in which they have a comparative advantage, would they benefit from trading with each other? Group of answer choices There is not enough information to know. No, at least one of them would not gain, and so would not gain from trade. Yes, they would both gain from trade.
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Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) Tacos (in tons) Hamburgers (in tons) Tacos (in tons) 162 135 90 108 18 90 180 54 36 45 270 54 Which country has an absolute advantage in producing tacos? The United States Which country has a comparative advantage in producing tacos? Mexico Suppose the United States is currently producing 180 tons of hamburgers and 54 tons of tacos and Mexico is currently producing 36 tons of hamburgers and 45 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer)
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