Suppose there exist two imaginary countries, Glacier and Sequoia. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor. Almonds Country (Pounds per hour of labor) Glacier 5 Sequoia 4 Shorts (Pairs per hour of labor) 10 16 Suppose that initially Glacier uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Glacier produces 5 million pounds of almonds and 30 million pairs of shorts, and Sequoia produces 12 million pounds of almonds and 16 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds and shorts it produces. Glacier's opportunity cost of producing 1 pound of almonds is almonds is of shorts. Therefore, comparative advantage in the production of shorts of shorts, and Sequoia's opportunity cost of producing 1 pound of has a comparative advantage in the production of almonds, and has a
Suppose there exist two imaginary countries, Glacier and Sequoia. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor. Almonds Country (Pounds per hour of labor) Glacier 5 Sequoia 4 Shorts (Pairs per hour of labor) 10 16 Suppose that initially Glacier uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Glacier produces 5 million pounds of almonds and 30 million pairs of shorts, and Sequoia produces 12 million pounds of almonds and 16 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds and shorts it produces. Glacier's opportunity cost of producing 1 pound of almonds is almonds is of shorts. Therefore, comparative advantage in the production of shorts of shorts, and Sequoia's opportunity cost of producing 1 pound of has a comparative advantage in the production of almonds, and has a
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Note:-
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
- Answer completely.
- You will get up vote for sure.
Transcribed Image Text:Suppose there exist two imaginary countries, Glacier and Sequoia. Their labor forces are each capable of supplying four million hours per week that
can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be
produced by one hour of labor.
Almonds
Country (Pounds per hour of labor)
Glacier
Sequoia
5
4
Shorts
(Pairs per hour of labor)
10
16
Suppose that initially Glacier uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Sequoia
uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Glacier produces 5 million
pounds of almonds and 30 million pairs of shorts, and Sequoia produces 12 million pounds of almonds and 16 million pairs of shorts. Assume there are
no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of almonds
and shorts it produces.
Glacier's opportunity cost of producing 1 pound of almonds is
almonds is
of shorts. Therefore,
comparative advantage in the production of shorts.
of shorts, and Sequoia's opportunity cost of producing 1 pound of
has a comparative advantage in the production of almonds, and
has a
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education