Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
8th Edition
ISBN: 9781337292603
Author: Mankiw
Publisher: Cengage Learning (2018)
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Chapter 3, Problem 6PA
Subpart (a):
To determine
Calculate opportunity cost .
Subpart (b):
To determine
Calculate opportunity cost.
Subpart (c):
To determine
Specialization in the production.
Subpart (d):
To determine
Trade and the price of the product.
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Students have asked these similar questions
Suppose that a tailor in Cottonland can sew either 40 cotton shirts or 10 silk shirts per week, and a tailor in Silkland can sew either 18 cotton shirts or 6 silk shirts per week. There are 20 tailors in Cottonland and 20 tailors is Silkland. Answer the following questions:
2.1. What country has the absolute advantage in sewing cotton shirts? What country has the absolute advantage in sewing silk shirts?
2.2. What country has the comparative advantage in sewing cotton shirts? What country has the comparative advantage in sewing silk shirts? Numerically
2.3. If the two countries specialize and produce according to the comparative advantage criterion, how much in terms of cotton and silk shirts each country will produce per week? Fill in the table below with your calculations.
Cotton shirts/per week
Silk shirts/per week
Cottonland
Silkland
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The following table describes the production
possibilities of two cities in the country of Baseballia:
Pairs of Red
Pairs of White
Socks per Worker
per Hour
Socks per Worker
per Hour
Boston
3
3
Chicago
2
1
a. Without trade, what is the price of white socks (in
terms of red socks) in Boston? What is the price in
Chicago?
b. Which city has an absolute advantage in the
production of each color sock? Which city has a
comparative advantage in the production of each
color sock?
c. If the cities trade with each other, which color sock
will each export?
d. What is the range of prices at which mutually
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Write an essay related to this treatise:NAFTA (North American Free Trade Agreement):
In the introduction, develop the origin of comparative advantage and its relationship with international trade, using the selected treaty as an example.
In the development of the essay, present:to. A description of the treaty that includes:* the reasons for the creation of the selected treaty and the countries included in it.* the benefits and effects of export and import in the treaty.* What were the obstacles encountered in the development of the treaty.
Chapter 3 Solutions
Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
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