Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
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Chapter 33, Problem 4SCQ

In Germany it takes three workers to make one television and four workers to make one video camera. In Poland It takes six workers to make one television and 12 workers to make one video camera.

  1. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the production of video cameras? How can you tell?
  2. Calculate the opportunity cost of producing one additional television set in Germany and In Poland. (Your calculation may involve fractions, which Is tine.) Which country has a comparative advantage in the production of televisions?
  3. Calculate the opportunity cost of producing one video camera in Germany and in Poland. Which country has a comparative advantage in the production of video cameras?
  4. In this example, is absolute advantage the same as comparative advantage, or not?
  5. In what product should Germany specialize? In what product should Poland specialize?

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In Germany it takes three workers to make one television and four workers to make one video camera. In Poland it takes six workers to make one television and 12 workers to make one video camera. Calculate the opportunity cost of producing one additional television set in Germany and in Poland. (Your calculation may involve fractions, which is fine.) Which country has a comparative advantage in the production of televisions?    Germany Both Poland and Germany  Poland   Neither Poland or Germany
Suppose that Country A and Country B can produce the following numbers of Chairs and Printers per worker per day. Which of the following is true? Country A Country B 25 Chairs 10 Printers 4 Country B has Absolute Advantage (in both products), and Country A has Comparative Advantage in Printers. Country A has Absolute Advantage (in both products), and Country B has Comparative Advantage in Printers. Country A has Absolute Advantage (in both products), and Country A has Comparative Advantage in Printers. Country B has Absolute Advantage (in both products), and Country B has Comparative Advantage in Printers.
Steel 50 25 0 25 50 Chemicals Italy 1 ton of steel for 1/2 ton of chemicals. 1 ton of steel for 1/3 ton of chemicals. 1 ton of steel for 1 ton of chemicals Steel 1 ton of steel for 2 tons of chemicals. 30 20 0 20 Italy and Greece are the only two economies in the world and they can produce steel or chemicals. The production possibilities curves for the two countries are shown in the graphs. What is the cost ratio for Greece? Chemicals Greece 60

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Principles of Economics 2e

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