2nd Edition

ISBN: 9781947172364

Author: Steven A. Greenlaw; David Shapiro

Publisher: OpenStax

Textbook Question

Chapter 33, Problem 29P

France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week.

Draw a production possibilities frontier for each country. Hint: Remember the production possibility frontier is the maximum that all workers can produce at a unit of time which, in this problem, is a week.
Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes.
Identity which country has the comparative advantage.
How much would France have to give up In terms of tomatoes to gain from trade? How much would it have to give up in terms of green beans?

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Chapter 33, Problem 28CTQ

Chapter 33, Problem 30P

Students have asked these similar questions

(Parts a-c) Assume two countries, Gisslovia and Gerardania, both have 1200 units of labor that can be used to produce food or clothing. In Gisslovia it takes 4 units of labor to produce one unit of food and 3 units of labor to produce one unit of clothing. In Geradania it takes 3 units of labor to produce one unit of food and 2 units of labor to produce one unit of clothing. a) If each country allocated one-half of its labor to food production how much food would be produced? b) If each country allocated one-half of its labor to clothing production how much clothing would be produced? c) Suppose Gisslovia only produced food. If Gerardania produced enough food to keep the total amount equal to part a, how much clothing would they produce?

Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. Quantity of Computers (Millions) 30 27 24 21 18 15 12 9 6 3 0 0 10 20 30 40 50 60 70 Quantity of Shirts (Millions) 80 90 100 If these countries were open to trade, U.S. PPF O True O False China PPF U.S. without Trade Suppose that without trade the workers in each country spend half their time producing each good. True or False: There are no longer gains from trade. * Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) to indicate this production and consumption point for China. China without Trade would…

The U.S. and Mexico both produce vehicles and tons of plastic, which are sold for the same price in both countries. Suppose that with one unit of labor and one unit of capital, the U.S. can produce either 20 vehicles or 43 tons of plastic and Mexico can produce either 10 vehicles or 18 tons of plastic. What is the opportunity cost of producing one vehicle (in terms of tons of plastic) for the U.S.?