MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 18, Problem 4SQ
To determine
The
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Exercise: production per unit of labour:
US: Wheat 300, Beef 100
Argentina: Wheat 20, Beef 20
a. Does either country have an absolute advantage in the production of wheat or beef? Explain
b. What is the opportunity cost of wheat in each country?
c. What is the opportunity cost of beef in each country?
d. Analyze comparative advantage and opportunities for trade between the U.S. and Argentina.
Exhibit 15-3 Potatoes and wheat output (tons per day)
Country
Potatoes
Wheat
United States
4
2
Ireland
3
1
In Exhibit 15-3, the United States has an absolute advantage in producing:
both.
potatoes.
neither.
wheat.
Per Winter Hat
US $10.00
Russia 5,000 Rubles
Per Bushel of Wheat
US $1.00
Russia 2,500 Rubles
a. What is the opportunity cost of producing one more winter hat in the US? In Russia?b. What is the opportunity cost of producing one more bushel of wheat in the US? In Russia?c. Which country has a comparative advantage in winter hats? In wheat?
Chapter 18 Solutions
MACROECONOMICS FOR TODAY
Ch. 18.4 - Prob. 1GECh. 18.6 - Prob. 1GECh. 18 - Prob. 1SQPCh. 18 - Prob. 2SQPCh. 18 - Prob. 3SQPCh. 18 - Prob. 4SQPCh. 18 - Prob. 5SQPCh. 18 - Prob. 6SQPCh. 18 - Prob. 7SQPCh. 18 - Prob. 8SQP
Ch. 18 - Prob. 9SQPCh. 18 - Prob. 10SQPCh. 18 - Prob. 11SQPCh. 18 - Prob. 1SQCh. 18 - Prob. 2SQCh. 18 - Prob. 3SQCh. 18 - Prob. 4SQCh. 18 - Prob. 5SQCh. 18 - Prob. 6SQCh. 18 - Prob. 7SQCh. 18 - Prob. 8SQCh. 18 - Prob. 9SQCh. 18 - Prob. 10SQCh. 18 - Prob. 11SQCh. 18 - Prob. 12SQCh. 18 - Prob. 13SQCh. 18 - Prob. 14SQCh. 18 - Prob. 15SQCh. 18 - Prob. 16SQCh. 18 - Prob. 17SQCh. 18 - Prob. 18SQCh. 18 - Prob. 19SQCh. 18 - Prob. 20SQ
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