Related questions
Concept explainers
31.If it takes one country one unit of labor to produce either a computer or a TV but it takes the other country three units of labor to produce a computer and four to produce a TV, then the first country has
A)a
B)an
C)an absolute advantage in TVs and computers but a comparative advantage in computers only.
D)an absolute advantage in TVs and computers but a comparative advantage in TVs only.
32.If it takes one country two units of labor to produce a computer and three units of labor to produce a TV but it takes the other country three units of labor to produce a computer and four to produce a TV, then the first country has
A)a comparative advantage in both goods.
B)an absolute advantage in TVs but a comparative advantage in computers.
C)an absolute advantage in TVs and computers but a comparative advantage in computers only.
D)an absolute advantage in TVs and computers but a comparative advantage in TVs only.
33.If it takes one country three units of labor to produce a computer and two units of labor to produce a TV but it takes the other country four units of labor to produce a computer and five to produce a TV, then the first country has
A)a comparative advantage in both goods.
B)an absolute advantage in TVs but a comparative advantage in computers.
C)an absolute advantage in TVs and computers but a comparative advantage in computers only.
D)an absolute advantage in TVs and computers but a comparative advantage in TVs only.
34.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 4 units of software and 4 units of hardware then
A)theUnited States has a comparative and absolute advantage in both goods.
B)China has a comparative and absolute advantage in both goods.
C)theUnited States has an absolute advantage in both goods.
D)theUnited States has a comparative advantage in both goods.
35.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 5 units of software and 5 units of hardware then
A)theUnited States has a comparative and absolute advantage in both goods.
B)China has a comparative and absolute advantage in both goods.
C)China has a comparative advantage in hardware and the U.S. has a comparative advantage in software.
D)theUnited States has a comparative advantage in both goods.
36.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 6 units of software and 6 units of hardware then trade can make
A)theU.S. better off but not China.
B)China better off but not the U.S.
C)neither better off.
D)both better off.
37.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 5 units of software and 5 units of hardware then
A)theUnited States has a comparative and absolute advantage in both goods.
B)China has a comparative and absolute advantage in both goods.
C)theUnited States has an absolute advantage in both goods.
D)theUnited States has a comparative advantage in both goods.
38.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 6 units of software and 4 units of hardware then
A)theUnited States has a comparative and absolute advantage in both goods.
B)China has a comparative and absolute advantage in both goods.
C)China has a comparative advantage in hardware and the U.S. has a comparative advantage in software.
D)theUnited States has a comparative advantage in both goods.
39.If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 6 units of software and 4 units of hardware then trade can make
A)theU.S. better off but not China.
B)China better off but not the U.S.
C)neither better off.
D)both better off.
40.One of the reasons economists approve of limiting trade would be
A)the protection of national security.
B)the preservation of a high employment company.
C)the preservation of a high wage company.
D)the preservation of a large production company.
Step by stepSolved in 4 steps with 1 images
- Suppose that Ontario and Vermont each produce two goods, maple syrup (M) and hockey sticks (H). The quantities of each good that can be produced by each region in a day are given below: ONTARIO VERMONT GALLONS OF MAPLE SYRUP/DAY 400 1200 HOCKEY STICKS/DAY 200 300 Which region has an absolute advantage in maple syrup production? Which region has an absolute advantage in hockey stick production? Find the opportunity costs of each good for both Ontario and Vermont. c. Should Ontario and Vermont specialize and trade? Which good should be produced by Ontario? Vermont? What are the terms of trade? Use PPCs and CPCs to show that each would be better off through specialization and trade. Of what principle does this question provide an example?arrow_forwardLawns Mowed Gardens Cultivated George 10 B 5 (D Jack 6 Table 2-5 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. 4 Refer to Table 2-5. Which of the following statements istrue? A) Jack has a comparative advantage in both tasks. George has a comparative advantage in both tasks. Jack has a comparative advantage in lawn mowing and George in garden cultivating. Jack has a comparative advantage in garden cultivating and George in lawn mowing. Ⓡarrow_forwardQUESTION 24 Country X can produce 10 cars or 20 computers per unit of labour, while Country Y can produce 8 cars or 16 computers per unit of labour. How does the concept of absolute advantage best apply to these countries? A. Country X should focus on producing computers, as it has an absolute advantage in car production. B. Country Y should specialize in producing cars, as it has an absolute advantage in car production. c. Both countries should produce cars and computers in equal proportions to maximize efficiency. D. Both countries should adopt protectionist policies to maintain domestic production levels.arrow_forward
- K Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) 0 40 80 120 Which country has an absolute advantage in producing tacos? Mexico Tacos (in tons) 108 72 36 0 Hamburgers (in tons) 0 8 16 24 Tacos (in tons) 60 40 20 Which country has a comparative advantage in producing tacos? The United States Suppose the United States is currently producing 80 tons of hamburgers and 36 tons of tacos and Mexico is currently producing 16 tons of hamburgers and 20 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer) and a total of additional ton(s) of tacos can be produced.arrow_forward10)Suppose that in a three-hour block of time you can either make 2 batches of chocolate chip cookies or word-process 10 pages of text. In contrast, your roommate Keshawn can either make 4 batches of cookies or word-process 5 pages of text in a three-hour block of time. Which of the following is correct * a)Your comparative advantage is in making cookies. b)None of the above c)Keshawn's comparative advantage is in word-processing text. d)Your comparative advantage is in word-processing text.arrow_forwardOpportunity Cost and the Gains from Specializ PPF Review Problems What is the opportunity cost of an extra calculator for Smith? What is the opportunity cost of an extra calculator for Jones? Who has the absolute advantage in computer production? Who has the absolute advantage in calculator production? Who has the comparative advantage in calculator production? Who has the comparative advantage in computer production? Jones 6 120arrow_forward
- Course: Macroeconomics Suppose that the USA can make 15,000,000 cars or 20,000,000 bottles of wine with one year's worth of labor. France can make 10,000,000 cars or 18,000,000 bottles of wine with one year's worth of labor. From these numbers, we can conclude: Which country has the absolute advantage in producing cars? Which country has the absolute advantage in producing wine? Which country has the comparative advantage in producing cars? Which country has the comparative advantage in producing wine? (Show opportunity cost calculations.)arrow_forwardQUESTION 7 65+ 60+ 55 50 45 40 282828 35+ 30 25 20 15 10 5+ Cay China's PPF + 5 10 15 20 25 30 35 40 45 50 55 Computer OA. 40 cars and 20 computers B. 40 cars and zero computers C. 20 cars and 20 computers 个 Cor 65+ 60- 55 50+ 45+ Refer to figures above. Suppose that China and Japan fully specialize in the goods in which they have a comparative advantage. Trade is then initiated between the two countries and 20 units of cars are exchanged for 20 units of computers. How many units of cars and computers will China be able to consume after trade? D.40 cars and 40 computers 40- 35+ 30 25- 20 15 10- 5 Japan's PPF 5 10 15 20 25 30 35 40 45 50 55 60 Computerarrow_forwardJohn and Jack run a car washing business. In one week John can wash 36 cars or he can wax 20 cars. In one week Jack can wax 12 cars or wash 24 cars. Based on the information given, has an absolute advantage in washing cars and has a comparative advantage in washing cars. O Jack : John O John : John O John : Jack O Jack : Jack « Previous f4 f5 f6 X f7 f10 4. 5 8 9 會 图 86 图arrow_forward
- 1. One German worker can produce either 5 cars or 10 tons of grain a year. One Japanese worker can produce either 4 cars or 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Japan well as the PPE 6 L which country has an absolute advantage in produ f) Given all the information above, which country has a comparative advantage in producing cars? Which country has a comparative advantage in producing grain? Why? g) Both countries will spend 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. Car Produced and Consumed (million) Tons of Grain Produced and Consumed (million) Germany Japan h) If each country only produces the good in which they have a comparative advantage and then traded 300 million tons of grain for 200 million cars, will both countries be better off? Why?arrow_forward56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 84 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the production of Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of sugar and million pounds of grain. Suppose that Maldonia ánd Lamponia agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the price of trade between Maldonia and Lamponia. W SUGAR (MIlons of pounds) SUGAR (MIlions of pounds)arrow_forwardMeagan, a contractor, is hired to install cabinets in a new home and has to decide whether to build the cabinets herself or purchase them from a local cabinet shop. a. Meagan should build the cabinets herself only if the cabinet maker has a comparative advantage in the production of cabinets. -she has a comparative advantage in the production of cabinets. -she has an absolute advantage in the production of cabinets. -the cabinet maker has an absolute advantage in the production of cabinets. b. If the cabinet maker is foreign rather than local, the answer to part a -does change regardless of trade costs. -does not change regardless of trade costs. -does change as long as trade costs are negligible. -does not change as long as trade costs are negligible.arrow_forward
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education