MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 18, Problem 5SQ
To determine
The
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Each country should specialize in producing that good for which it
a. has a comparative advantage
b. has an absolute advantage
c. it has a higher opportunity cost
Alexandra’s Production Possibilities Schedule
Natalia’s Production Possibilities Schedule
Number of Scarves Knitted per Hour
Number of Sweaters Knitted per Hour
Number of Scarves Knitted per Hour
Number of Sweaters Knitted per Hour
0
4
0
4
3
3
2
3
6
2
4
2
9
1
6
1
12
0
8
0
If Natalia were to export a good, which one(s) would she export?
Country A can produce 20 units of wheat or 10 units of corn, while Country B can produce 15 units of wheat or 5 units of corn.
Which country has the comparative advantage in producing 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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- If France is said to have an absolute advantage over Mexico in the production of wheat, this means that, given the same resources, Mexico must have an absolute advantage in producing some good other than wheat. a. France can produce more wheat than Mexico. b. France has an absolute advantage in all goods that are complements to wheat. c. France must have an absolute advantage over Mexico in producing all goods. d. Mexico must have a comparative advantage over France in the production of wheat.arrow_forwardPer 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?arrow_forwardIn Exhibit 1, the United States has a comparative advantage in producing: Group of answer choices potatoes. wheat. both. neither. PreviousNextarrow_forward
- What is the likely effect of imposing trade tariffs on imported goods on the consumer price index (CPI) in the importing country? A. The CPI will decrease because imported goods become more expensive. B. The CPI will remain unchanged because tariffs only affect the supply side. C. The CPI will increase as the cost of imported goods rises. D. The CPI will initially decrease but then increase as domestic producers adjust prices.arrow_forwardUse the following information for the next two questions: the U.S. can produce 4 tons of potatoes per day or 2 tons of wheat per day. Ireland can produce 3 tons of potatoes per day or one ton of wheat. 17. The opportunity cost for Ireland producing one ton of potatoes is how many tons of wheat? а. one-fourth b. 1/3 с. 1 d. 3 The U.S. has the comparative advantage in producing potatoes. wheat. а. b. с. both. d. neither. It is possible to have a comparative advantage without having any absolute advantages. а. true b. falsearrow_forwardWith reference to Table 2 below, indicate in what commodity the U.S. and the Philippines have a comparative advantage? Table 2 COMMODITY U.S. Philippines Wheat (bushels/man-hour) 7 1 Rice (sacks/man-hour) 4 3arrow_forward
- Which country has comparative at producing good x. How can you tell. Which country has a comparative advantage at producing yarrow_forwardConsider the information in the attached table, complete the sentence with the correct alternative:Samuel has a comparative advantage in the production of ___________________ and Olivia has a comparative advantage in the production of ____________________________.a. Wheat, wheatb. Wheat, porkc. Pig, wheatd. Pig, porkNote: make your own calculations to verify the solution.arrow_forwardWith trade, Guatemala will a) export 22 units of coffee. b) export 10 units of coffee. c) import 30 units of coffee. d) import 12 units of coffee.arrow_forward
- Country -1 Country -2 Coconut 40 Coconuț 20 50 30 Fish Fish Calculate opportunity cost for each good for each country. Country 1 and 2 have comparative advantages in which goods? (Show the calculation in your answer) Write focused answer.arrow_forwardImagine 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.arrow_forwardWhen a country allows trade and becomes an importer of a good: a. Both domestic producers and domestic consumers become better off b. Domestic producers become better off, and domestic consumers become worse off c. Domestic producers become worse off, and domestic consumers become better off d. Both domestic producers and domestic consumers become worse offarrow_forward
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