PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
thumb_up100%
Chapter 19, Problem 19CTQ
Look at Exercise 33.2. Compute the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
B1) Country A has 10 million workers and Country B has 20
million workers. Each worker in Country A can produce 2 units of
wine and 4 units of fabric in a year. Each worker in Country B
can produce 3 units of wine and 5 units of fabric in a year.
a) What is Country A's opportunity cost of producing wine (in
terms of fabric given up)? What is Country A's opportunity cost
of producing fabric (in terms of wine given up)?
b) What is the maximum production of wine in country A in a
year? What is the maximum production of wine in country B in a
year?
c)Which country has a comparative advantage in producing
fabric? Explain your answer in no more than two sentences.
Which country has absolute advantage in producing fabric?
Explain your answer in no more than two sentences.
d) Which country should import wine? Explain your answer.
What is the range of trading prices (in terms of fabric) for wine
between the two countries?
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?
1. Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food 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 5000.
a) Which country has the comparative advantage in food? In fuel? Explain.
b) Which good(s) should each country specialize in?
c) Discuss the benefits of specialization for each country.
Chapter 19 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 19 - True or False: The source of comparative advantage...Ch. 19 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 19 - In France it takes one worker to produce one...Ch. 19 - In Germany it takes three workers to make one...Ch. 19 - How can there be any economic gains for a country...Ch. 19 - Table 33.15 shows how the average costs of...Ch. 19 - If the removal of trade banters is so beneficial...Ch. 19 - What is absolute advantage? What is comparative...Ch. 19 - Under what conditions does comparative advantage...Ch. 19 - What factors does Paul Krugman identity that...
Ch. 19 - Is it possible to have a comparative advantage in...Ch. 19 - How does comparative advantage lead to gains from...Ch. 19 - What is intra-industry trade?Ch. 19 - What are the two main sources of economic gains...Ch. 19 - What is splitting up the value chain?Ch. 19 - Are the gains from international trade more likely...Ch. 19 - Are differences in geography behind the...Ch. 19 - Why does the United States not have an absolute...Ch. 19 - Look at Exercise 33.2. Compute the opportunity...Ch. 19 - You just overheard your friend say the following:...Ch. 19 - Look at Table 33.9. Is there a range of trades for...Ch. 19 - You just got a job in Washington, D.C. You move...Ch. 19 - Does intra-industry trade contradict the theory of...Ch. 19 - Do consumers benefit from intra-industry trade?Ch. 19 - Why might intra-industry trade seem surprising...Ch. 19 - In World Trade Organization meetings, what do you...Ch. 19 - Why might a low-income country put up barriers to...Ch. 19 - Can a nations comparative advantage change over...Ch. 19 - France and Tunisia both have Mediterranean...Ch. 19 - In Japan, one worker can make 5 tons of rubber or...Ch. 19 - Review the numbers for Canada and Venezuela from...Ch. 19 - In Exercise 33.31, is there an ask where...Ch. 19 - From earlier chapters you will recall that...Ch. 19 - Consider two countries: South Korea and Taiwan....Ch. 19 - If trade increases world GDP by 1 per year, what...
Additional Business Textbook Solutions
Find more solutions based on key concepts
Define cost object and give three examples.
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
E2-13 Identifying increases and decreases in accounts and normal balances
Learning Objective 2
Insert the mis...
Horngren's Accounting (11th Edition)
E2-13 Identifying increases and decreases in accounts and normal balances
Learning Objective 2
Insert the mis...
Horngren's Accounting (12th Edition)
What major trends discussed at the end of this chapter are different from previous external environments and th...
Principles of Management
Define costvolumeprofit analysis.
Cost Accounting (15th Edition)
Explain the difference between a period cost and a product cost.
Principles of Accounting Volume 2
Knowledge Booster
Similar questions
- There are 100 workers in Pakistan, and each worker can produce either 10 shirts or 2 hats. There are 200 workers in the Bangladesh, and each can produce 4 shirts or 10 hats.] 1. Draw the Production Possibility Curves (PPC) for each country. What is the opportunity cost of shirts in Pakistan? What is the opportunity cost of shirts in Bangladesh? Which country has a comparative advantage in the production of shirts? 2. In the absence of trade, if Pakistan consumes 600 shirts, how many hats can it consume? In the absence of trade, if Bangladesh consumes 500 hats, how many shirts can it consume? 3. Someone now proposes that Bangladesh and Pakistan enter into a trade agreement. Under this agreement, the Bangladesh will give Pakistan 500 hats and Pakistan will give Bangladesh 200 shirts. If Pakistan continues to consume 600 shirts, how many hats will it be able to consume under this proposal? If Bangladesh continues to consume 500 hats, how many shirts will it be able to consume under this…arrow_forwardSuppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food 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 5000. (d) Which country has the comparative advantage in food? In fuel? Explain. (e) Which good(s) should each country specialize in?arrow_forwardSuppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food 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 5000. (g) If the terms of trade is 2 to 1 in favour of the country with the comparative advantage in food. Determine the combination of the two goods that each country will consume after trade if the country with the comparative advantage in fuel imports 4000 units of food. Label this point B and B* respectively. h) Who gains from trade? Who loses? What is the impact if any on the world? (i) What should the terms of trade be to make trade beneficial for BOTH Japan and Peru? Explain.arrow_forward
- Which country has a comparative advantage in the production of wine?arrow_forwardArthur can milk 10 goats per hour or shear 4 sheep per hour. Ben can milk 6 goats per hour or shear 3 sheep per hour. Who has the absolute advantage at milking goats? Who has the absolute advantage at shearing sheep? What are the opportunity costs of milking a goat for Arthur and Ben? What are the opportunity costs of shearing a sheep for Arthur and Ben? Based on comparative advantage, who should milk goats and how should shear sheep?arrow_forwardhome cheese alc=1hr/kg wine alw=2hrs/gallon foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign* ) country has an absolute advantage? Show in which product does the Home (Foreign* ) country has comparative advantage? Calculate the relative supply (RS) With trade, what is the equilibrium range that the relative price of cheese to wine will settle? Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?arrow_forward
- Labor productivity coefficients for the US and Brazil are given by the following table: Country Wheat per week Clothing per week Labor(number of workers) United States 2 8 100 Brazil 1 2 120 Solve for: Who has the absolute advantage in wheat? What is the opportunity cost of 1 unit of wheat in the US? in Brazil? What is the opportunity cost of 1 unit of clothing in the US? in Brazil? Who has the comparative advantage in Wheat? In Clothing? Draw the production possibility frontier for the US. (Put Wheat on the Y-axis and Clothing on the X-axis) For Brazil (Put Wheat on the Y-axis and Clothing on the X-axis) Suppose each country decides to split its labor force equally on the production of each good. Locate the point on the PPF curve for each country that represents this allocation of labor. What’s their production and consumption combination # at this point?arrow_forwardSuppose that Germany can produce at most 150 cars or 50 tractors per month. France can produce at most 40 cars or 80 tractors per month. Graph and explain the opportunity costs facing each country.arrow_forwardDraw the production possibility curve for each country using the data provided in the table. b. Which country has an absolute advantage in what product? Which country has a comparative advantage in what product? Show your work! c. Without trade, what is the price of food in terms of computers for both countries? Showyour work! d. What is the range of prices (i.e., the CPC) at which trade can occur? Also, show (a) the possible CPC for each country and (b) the possible production and consumption possibility lines for both countries after trade. Show your work!arrow_forward
- Argentina and Brazil are considering the potential gains of trade. There is only one factor of production: labor. There are only two goods being produced in either economy: coffee and wine. Argentina can employ 10,000 hours of labor per month. Producing 1 lb. of coffee requires 2 hours of labor, and producing 1 bottle of wine requires 4 hours of labor, in Argentina. Similarly, Brazil can employ 10,000 hours of labor per month. Producing 1 lb. of coffee requires 1 hour of labor, and producing 1 bottle of wine requires 5 hours of labor, in Brazil.arrow_forwardCalculate the opportunity cost as the country moves from point A to B, B to C, C to D, D to E and E to F, If draw a production possibilities with Wheat on the vertical axis and Steel on the horizontal axis, what will be the shape of the curve and why? Product Steel Wheat A 0 100 Production Possibilities B 1 90 с 2 75 D 55 E 4 30 F 5 0arrow_forwardPart II. State three reasons for the PPF to shift to the right or left. Describe the circular flow of income and expenditures Why do you think the PPF of the Philippines will possibly shift to the left? Compare the points inside the PPF and outside the PPF Give four examples of normative and positive statements How can you apply the principle of opportunity cost in your study? Please give an example Do you think the 24-hour store follow the marginal benefit principles? Why or why not If the fixed input is the two hectare of land and the variable input is fertilizer explain how the principle of diminishing return work in the outputs. Give an example of positive externality. Explain one factor that determines demand Differentiate between the consumer and producer surplus What information does the demand function convey? What is the information does the point of intersection between demand and supply curve convey? Give at least three conditions for the demand to shift to the right or…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax