Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
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.
- 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? - 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 acomparative advantage in the production of televisions? - 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?
- In this example, is absolute advantage the same as comparative advantage, or not?
- In what product should Germany specialize? In what product should Poland specialize?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
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
Chapter 33 Solutions
Principles of Economics 2e
Ch. 33 - True or False: The source of comparative advantage...Ch. 33 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 33 - In France it takes one worker to produce one...Ch. 33 - In Germany it takes three workers to make one...Ch. 33 - How can there be any economic gains for a country...Ch. 33 - Table 33.15 shows how the average costs of...Ch. 33 - If the removal of trade banters is so beneficial...Ch. 33 - What is absolute advantage? What is comparative...Ch. 33 - Under what conditions does comparative advantage...Ch. 33 - What factors does Paul Krugman identity that...
Ch. 33 - Is it possible to have a comparative advantage in...Ch. 33 - How does comparative advantage lead to gains from...Ch. 33 - What is intra-industry trade?Ch. 33 - What are the two main sources of economic gains...Ch. 33 - What is splitting up the value chain?Ch. 33 - Are the gains from international trade more likely...Ch. 33 - Are differences in geography behind the...Ch. 33 - Why does the United States not have an absolute...Ch. 33 - Look at Exercise 33.2. Compute the opportunity...Ch. 33 - You just overheard your friend say the following:...Ch. 33 - Look at Table 33.9. Is there a range of trades for...Ch. 33 - You just got a job in Washington, D.C. You move...Ch. 33 - Does intra-industry trade contradict the theory of...Ch. 33 - Do consumers benefit from intra-industry trade?Ch. 33 - Why might intra-industry trade seem surprising...Ch. 33 - In World Trade Organization meetings, what do you...Ch. 33 - Why might a low-income country put up barriers to...Ch. 33 - Can a nations comparative advantage change over...Ch. 33 - France and Tunisia both have Mediterranean...Ch. 33 - In Japan, one worker can make 5 tons of rubber or...Ch. 33 - Review the numbers for Canada and Venezuela from...Ch. 33 - In Exercise 33.31, is there an ask where...Ch. 33 - From earlier chapters you will recall that...Ch. 33 - Consider two countries: South Korea and Taiwan....Ch. 33 - If trade increases world GDP by 1 per year, what...
Additional Business Textbook Solutions
Find more solutions based on key concepts
E2-13 Identifying increases and decreases in accounts and normal balances
Learning Objective 2
Insert the mis...
Horngren's Accounting (11th Edition)
Prepare an adjusted trial balance from the following account information, and also considering the adjustment d...
Principles of Accounting Volume 1
Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to us...
Managerial Accounting (4th Edition)
Discuss the major advantages and disadvantages of small businesses.
Principles of Management
Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be...
Financial Accounting (12th Edition) (What's New in Accounting)
Define cost pool, cost tracing, cost allocation, and cost-allocation base.
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Knowledge Booster
Similar questions
- Jefferson Franklin 1 wheat 1/2 cotton The table above shows the number of hours required to produce one bushel of cotton and one bushel of wheat for Jefferson and Franklin. If each person specializes according to his comparative advantage(s), a mutually beneficial price ratio would be = 1 wheat= 2/3 cotton 1 wheat = 0.4 cotton Cotton (per bushel) 10 hours 12 hours 1 wheat 1/3 cotton = Wheat (per bushel) 5 hours 4 hours raarrow_forwardSuppose there are two countries for analyses, the United States and Indonesia. Assume that 2000 man hours are available in the United States and 36000 in Indonesia. The following table provides information on how many man-hours are needed to produce one unit of the same goods. Indonesia United States Cloth 50 3 Machines 100 5 2.1) Which country has the comparative advantage of cloth and in machines? Show your calculations.arrow_forwardAssume that an American worker can produce 5 cars per year or 10 tons of grain per year, whereas a Japanese worker can produce 15 cars per year or 5 tons of grain per year. Assume that labor is the only input used in car and grain production. Which country has the absolute advantage in producing cars? In producing grain? For the United States, what is the opportunity cost of producing a car? What is the opportunity cost of producing a ton of grain? Show how you arrived at your numbers. For Japan, what is the opportunity cost of producing a car? What is the opportunity cost of producing a ton of grain? Show how you arrived at your numbers. If free trade is allowed, which country will import cars? Which country will import grain? Explain.arrow_forward
- Suppose that Greece and Sweden both produce oil and cheese. Greece's opportunity cost of producing a pound of cheese is 4 barrels of oil while Sweden's opportunity cost of producing a pound of cheese is 10 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the production of cheese and has a comparative advantage in the production of oil. Suppose that Greece and Sweden consider trading cheese and oil with each other. Greece can gain from specialization and trade as long as it receives more than of oil for each pound of cheese it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than of cheese for each barrel of oil it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Sweden and Greece to gain from trade? Check all that apply.…arrow_forwardSuppose that Spain and Switzerland both produce oil and cheese. Spain's opportunity cost of producing a pound of cheese is 4 barrels of oil while Switzerland's opportunity cost of producing a pound of cheese is 10 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the production of cheese and has a comparative advantage in the production of oil. Suppose that Spain and Switzerland consider trading cheese and oil with each other. Spain can gain from specialization and trade as long as it receives more than of oil for each pound of cheese it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than of cheese for each barrel of oil it exports to Spain. Based on your answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Switzerland and Spain to gain from…arrow_forwardIn the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. In the United Kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. Show by way of calculations: a) The United States has absolute advantage in the production of? b) The United Kingdom has a comparative in the production of? c) If trade occurs between the United States and the United Kingdom, American firms will specialize in the production of?arrow_forward
- Suppose that Portugal and Switzerland both produce jeans and stained glass. Portugal's opportunity cost of producing a pane of stained glass is 4 pairs of jeans while Switzerland's opportunity cost of producing a pane of stained glass is 10 pairs of jeans. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that the production of stained glass and has a comparative advantage in the production of jeans. Suppose that Portugal and Switzerland consider trading stained glass and jeans with each other. Portugal can gain from specialization and trade as long as it receives more than of jeans for each pane of stained glass it exports to Switzerland. Similarly, Switzerland can gain from of stained glass for each pair of jeans it exports to Portugal. trade as long as it receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of jeans) would allow both Switzerland and…arrow_forwardThe 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.?arrow_forwardSuppose Mexico can produce either 2 million tomato plants or 2 million cannabis plants while the United States can produce 4 million tomato plants or 4 million cannabis plants during the same time period. Which country has the absolute advantage in tomatoes? A. Neither B. Mexico C. United States Who has the absolute advantage in cannabis? A. United States B. Mexico C. Neither Which country has the comparative advantage in tomatoes? A. United States B. Mexico C. Neither Which country has the comparative advantage in cannabis? A. Neither B. United States C. Mexicoarrow_forward
- Suppose that Greece and Sweden both produce fish and shoes. Greece's opportunity cost of producing a pair of shoes is 5 pounds of fish while Sweden's opportunity cost of producing a pair of shoes is 10 pounds of fish. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the production of shoes and has a comparative advantage in the production of fish. Suppose that Greece and Sweden consider trading shoes and fish with each other. Greece can gain from specialization and trade as long as it receives more than of shoes it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more of fish for each pair than of shoes for each pound of fish it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of fish) would allow both Sweden and Greece to gain from trade? Check all that аpply. 11 pounds of fish per pair of shoes…arrow_forwardThe U.S. can produce 100 pounds of beef or 10 cars; in contrast Germany can produce 40 pounds of beef or 30 cars. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing cars? What is the opportunity cost of producing one pound of beef in the U.S. What is the opportunity cost of producing one pound of beef in Germany?arrow_forwardComplete the following table by determining the opportunity cost of a car and of a ton of grain for both the United States and Japan. Opportunity Cost of 1 Car 1 Ton of Grain (In terms of tons of grain given up) (In terms of cars given up) United States Japan Given this information, has an absolute advantage in producing cars, and has an absolute advantage in producing grain. Also, has a comparative advantage in producing cars, and has a comparative advantage in producing grain. Assume that without trade, half of each country's workers produce cars and half produce grain. Complete the following table with the quantities of cars produced and consumed in each country if there is no trade. Cars Produced and Consumed Tons of Grain Produced and Consumed (Millions) (Millions) United States Japan True or False: Both countries would be better off if they produced the good in which they have a comparative advantage and then traded 200 million tons of grain for 100 million cars.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc