Assume the table below shows the quantities of automobiles and computers that a worker can produce in a day in the United States and Japan.AutomobilesComputersUnited StatesJapan4228Suppose each country has 2,000 workers and consumes the following (per day) without trade from allocating 1,000 workers to automobile production and 1,000 workers to computer production:United StatesJapanAutomobiles4,0002,000Computers4,00028,000If both countries specialize completely by producing only that for which they have a comparative advantage and then trade 2,000 automobiles for 14,000 computers, what will each country's consumption of automobiles andcomputers be?To answer this question, fill in the table below with the amounts of automobiles and computers the United States and Japan will consume with specialization and trade. (Enter your responses as whole numbers.)AutomobilesComputersUnited StatesJapan

In the international market, when two countries make a trade on the basis of their comparative…

Answered: ssume the table below shows the…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 4SCQ: In Germany it takes three workers to make one television and four workers to make one video camera....

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The following graph is the respective production possibility curves for the USA and South Korea. It shows there total output of medical devices and cars in a state of autarky (no trade), and it illustrates the gains that both countries can benefit from when they engage in trade. 10,000 10,000 8,000 tc 8,000 6,000 6,000 Consumpfion wth trode Consumplion wih trode 4,000 4,000 2,000 2,000 D. 1,000 0.5 1 3 2. 3 Automobiles (millions) Automobiles (millions) (a) USA (b) South Korea Medical Devices Automobiles (millions) USA 4,000 0.5 million South Korea 1,000 2 million Answer the following questions utilizing the textbook and your lecture videos: 1) What assumption in the production possibilities model may lead the model to overstate the gains from trade and cause the actual gains to be less than predicted by the model? 2) Who gains from trade in this scenario? Who may be hurt by trade in this scenario? 3) Do you think there is a role for the government to help those who are hurt by trade in…
Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
Suppose 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 2.4 With the aid of a graph, explain why both countries benefit from trade when prices are within the range of 1.666675 cloths per machine and 2 cloths per machine.
The table below shows the production of oil and lumber of ONE worker in China and India: rice (in pounds) shirts (unit) CHINA 400 200 INDIA 330 110 a) BEFORE trade (or with no trade), each country has 100 workers, and they allocate the worker for the production of the goods in the following way: China allocates 35 workers in the production of rice, and 65 workers in the production of shirts; India allocates 50 workers in the production of rice and 50 workers in the production of shirts. Find the maximum production and consumption of both goods for each country! b) If the countries decide to engage in trade (WITH TRADE), they will specialize in the production of the good in which they have comparative advantage. In which good should China specialize? How about India? JUSTIFY! (To answer this question you must calculate the opportunity cost of each good for both countries and then find the country's comparative advantage). What is the WITH TRADE production of the countries? c) If the…
Draw a table showing Autarky price ratios for each country and a diagram for the consumption and production possibilities frontier in Autarky when Canada produces 2000 units of corn with all its labour resources or 8000 units of wool with all its labour resources, consumes 1000 of corn and 4000 of wheat. Brazil has 12000 units of labour available. It takes 6 hours to produce a unit of corn and 3 hours to produce a unit of wool. Brazil consumes 1200 corn and 1600 wool.
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?
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 a comparative 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?
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
Chairs Sofas Unskilled Workers 6 4 Skilled Workers 10 6 The first column in the above table above shows how many chairs an unskilled or skilled worker could produce in eight hours. The second column shows how many sofas an unskilled or skilled worker could produce if instead they spent those eight hours producing sofas. According to the data, [ Select ] an absolute advantage in making either type of good. Based on comparative advantage, who should make chairs and who should make sofas? [ Select ] a comparative advantage in making chairs. [ Select] a comparative advantage in making sofas.
Suppose Japan and Great Britain produce only cell phones and digital music players. Assume that each country uses only labor to produce each good, and that the cell phones and digital music players made in Japan and Great Britain are exactly alike. The table below shows how much each country can produce of each good with one hour of labor: Output per Hour of Labor Cell Phones Japan Great Britain 23 2 Digital Music Players 16 7 Suppose that Japan and Great Britain do not trade with each other. Each has 100 hours of labor with which to produce cell phones and digital music players, and the countries are currently producing amounts of each good shown in the table below: Japan Great Britain Consumption with 100 Hours of Labor Cell Phones 2,070 160 Digital Music Players 160 140 Assume now that each country specializes in producing that good in which it has a comparative advantage. Further, assume for simplicity that one cell phone can be traded for one digital music player. If Japan trades…
scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
4. Specialization and trade 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 Shenandoah and Rainier. Both countries produce almonds and pistachios, each initially (l.e., before specialization and trade) producing 18 million pounds of almonds and 9 million pounds of pistachios, as indicated by the grey stars marked with the letter A. PISTACHIOS (Millions of pounds) 48 42 36 30 24 18 12 6 0 PPF Shenandoah A 0 6 12 18 24 30 36 ALMONDS (Millions of pounds) 42 48 ? PISTACHIOS (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF 6 Rainier A 18 12 24 30 36 ALMONDS (Millions of pounds) 42 48 ?

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