Suppose Malaydia's production possibilities include a maximum of 150 units of rice and 250 units of lumber, and Canada's production possibilities include a maximum of 300 units of rice or 160 units of lumber. Then suppose each country initially allocates 50% of it's labor to producing each product. a. Total production by the 2 countries equal of rice and lumber? b. Now suppose Malaysia increases the labor it allocates to kumber by 10%. Its lumber production rise by and it's rice production falls by. c. If Canada reallocates it's labor to increase its rice production by exactly the amount that Malaydia's rice production fell, by how much must it's lumber production fall? d. State the combines effects on total production of the reallocations in part b and c. Total production of rice changes by Total production of lumber changes by _____

Suppose Malaydia's production possibilities include a maximum of 150 units of rice and 250 units of lumber, and Canada's production possibilities include a maximum of 300 units of rice or 160 units of lumber. Then suppose each country initially allocates 50% of it's labor to producing each product. a. Total production by the 2 countries equal of rice and lumber? b. Now suppose Malaysia increases the labor it allocates to kumber by 10%. Its lumber production rise by and it's rice production falls by. c. If Canada reallocates it's labor to increase its rice production by exactly the amount that Malaydia's rice production fell, by how much must it's lumber production fall? d. State the combines effects on total production of the reallocations in part b and c. Total production of rice changes by Total production of lumber changes by _____

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 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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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?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?
мсаз Austria can produce 1 unit of food using 12 hours of labour time and 1 unit of machinery using 4 hours. In Greece it takes 8 hours of labour time to produce 1 unit of food and 4 hours to produce 1 unit of machinery. These productivity conditions imply: A I do not want to answer this question. Austria has an absolute advantage in machinery production C Greece has an absolute advantage in machinery production Austria has a comparative advantage in machinery production E Neither country has a comparative advantage in machinery production F Greece has a comparative advantage in machinery production
. The countries of Orion and Scorpius are small mountainous nations. Both produce granite and blueberries. Each nation has a labor force of 800. The following table gives production per month for each worker in each country. Assume productivity is constant and identical for each worker in each country. Orion workers Scorpius workers Tons of Granite Bushels of Blueberries 18 6 3 12 Productivity of one worker for one month a. Which country has an absolute advantage in the production of granite? Which country has an absolute advantage in the production of blueberries? b. Which country has a comparative advantage in the production of granite? Of blueberries? c. Sketch the PPF's for both countries. d. Show that specialization and trade can move both countries beyond their PPF's
Suppose there are two countries Peru and Japan that produces 7,523 units ofFood or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5,000. d) Which country has the comparative advantage in food? In fuel? Explain. e) Which good(s) should each country specialized in?
Two countries (A and B) produce tea and oranges using labor. The number of hours of labor required to produce these goods are given as follows: Country Тea Oranges A 6 20 В 8 30 If both countries have 1500 hours of labor available, explain how they can gain from trade.
Imagine that it takes an average Australian miner 10 hours to mine a metric ton of coal and 20 hours to mine a metric ton of manganese. It takes the average South African miner 4 hours to mine a metric ton of coal and 12 hours to mine metric ton of manganese.Create a table to show how productive each miner is in a day. a. In what task does each miner have a comparative advantage? b. Which resource will each country import? How about export? c. Explain how markets provide the opportunity for the mining companies to specialize and earn gains from trade.
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 2.5 Indonesia is a developing country and the United States a developed country. Do you think Indonesia benefits from trade with the United States? What should the trade ratio be for Indonesia to benefit from trade.
Using the numbers in the table, determine which country has a comparative advantage in producing each product. Output per Hour of Work Switzerland Canada Smartphones 8 5 Which of the following statements is true? A. The opportunity cost for Canada to produce one Smartphone is 0.60 Fitness Bracelet. B. The opportunity cost for Switzerland to produce one Fitness Bracelet is 1.25 Smartphones. OC. The opportunity cost for Switzerland to produce one Smartphone is 0.80 Fitness Bracelet. OD. The opportunity for Canada to produce one Smartphone is 1.67 Fitness Bracelets. Fitness Bracelets 10 3
2. In the USA 1 unit of labor can produce 50 cars while in Canada 1 unit of labor can produce5 cars. The total amount of labor in each country is L = 100. Which one of these statements iscorrect?A. Canada has comparative advantage on the production of cars.B. The USA has comparative advantage on the production of cars.C. Since their production possibility frontiers are the similar neither country has comparativeadvantage on the production of cars.D. Not enough information to answer this question.
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Labor Hours Number of Units Needed to Make Produced in 24 1 Unit of Hours Cheese Bread Cheese Bread England2 Spain 3 3 12 8 8 4 Which of the following statement is correct? England has the comparative advantage in Cheese Spain has the comparative advantage in Cheese England has the comparative advantage in both Cheese and Bread Spain has the comparative advantage in both Cheese and Bread
2. Gains from trade Consider two neighboring island countries called Felicidad and Bellissima. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The followlng table shows the amount of rye or jeans that can be produced using 1 hour of labor. Rye Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) 20 Felicidad 16 Bellissima Initially, suppose Bellissima uses 1 million hours of labor per month to produce rye and 3 million hours per month to produce jeans, while Felicidad uses 3 million hours of labor per month to produce rye and 1 millon hours per month to produce jeans. Consequently, Felicidad produces 15 million bushels of rye and 20 million pairs of jeans, and Bellissima produces 8 million bushels of rye and 48 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and…