The and table below shows the production possibilities for Canada and Japan. Suppose that, prior to specialization and trade, both Canada Japan are producing combination C. Product DVD players Bushels of wheat Product DVD players Bushels of wheat A 20 0 A 40 0 B 15 20 B 30 7.5 CANADA'S PRODUCTION POSSIBILITIES с 10 48 JAPAN'S PRODUCTION POSSIBILITIES с 20 15 D 5 60 D 10 22.5 E 0 80 E 0 30 a) Draw the production possibilities curve for Canada in the graph A, and indicate its present output position. Draw the production possibilities curve for Japan in graph B, and indicate its present output position. Plot only the endpoints of each curve in the graphing areas using the appropriate tool. Plot the output combination in each graph using the Point tool.

The and table below shows the production possibilities for Canada and Japan. Suppose that, prior to specialization and trade, both Canada Japan are producing combination C. Product DVD players Bushels of wheat Product DVD players Bushels of wheat A 20 0 A 40 0 B 15 20 B 30 7.5 CANADA'S PRODUCTION POSSIBILITIES с 10 48 JAPAN'S PRODUCTION POSSIBILITIES с 20 15 D 5 60 D 10 22.5 E 0 80 E 0 30 a) Draw the production possibilities curve for Canada in the graph A, and indicate its present output position. Draw the production possibilities curve for Japan in graph B, and indicate its present output position. Plot only the endpoints of each curve in the graphing areas using the appropriate tool. Plot the output combination in each graph using the Point tool.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter28: International Trade And Finance

Section: Chapter Questions

Problem 1SQP

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Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
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?
The table below shows how many millions of cars and trucks each country can produce in one year. Based on the information, which of the following is true? Maximum Country Country outputs A B CARS 30 m 35 m TRUCKS 6 m 21 m Copyright: www.economicsonline.co.uk Country A has the comparative advantage in trucks Country B has the comparative advantage in cars Country A has the comparative advantage in cars Country A has the absolute advantage in cars
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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 2.1) Which country has the comparative advantage of cloth and in machines? Show your calculations.
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