Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 2, Problem 2.2.4PA
Subpart (a):
To determine
US and Canada
Subpart (b):
To determine
Subpart (c):
To determine
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Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day.
Part 2
France
Germany
Wine (Bottles)
Cheese (Pounds)
Wine (Bottles)
Cheese (Pounds)
0
8
0
25
1
6
1
20
2
4
2
15
3
2
3
10
4
0
4
5
5
0
Part 3
Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese?
Part 4
A.
Neither has a comparative advantage producing wine or cheese.
B.
France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese.
C.
France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine.
D.
France has a comparative advantage producing wine and cheese.
E.
Germany has a comparative advantage producing wine and cheese.
Part 5
Suppose that France is…
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?
If England and Scotland decide to trade, which commodity will Scotland export to England? Explain.
If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.
Suppose that a tailor in Cottonland can sew either 40 cotton shirts or 10 silk shirts per week, and a tailor in Silkland can sew either 18 cotton shirts or 6 silk shirts per week. There are 20 tailors in Cottonland and 20 tailors is Silkland. Answer the following questions:
2.1. What country has the absolute advantage in sewing cotton shirts? What country has the absolute advantage in sewing silk shirts?
2.2. What country has the comparative advantage in sewing cotton shirts? What country has the comparative advantage in sewing silk shirts? Numerically
2.3. If the two countries specialize and produce according to the comparative advantage criterion, how much in terms of cotton and silk shirts each country will produce per week? Fill in the table below with your calculations.
Cotton shirts/per week
Silk shirts/per week
Cottonland
Silkland
Chapter 2 Solutions
Microeconomics (7th Edition)
Ch. 2 - Prob. 1TCCh. 2 - Prob. 2TCCh. 2 - Prob. 2.1.1RQCh. 2 - Prob. 2.1.2RQCh. 2 - Prob. 2.1.3RQCh. 2 - Prob. 2.1.4PACh. 2 - Prob. 2.1.5PACh. 2 - Prob. 2.1.6PACh. 2 - Prob. 2.1.7PACh. 2 - Prob. 2.1.8PA
Ch. 2 - Prob. 2.1.9PACh. 2 - Prob. 2.1.10PACh. 2 - Prob. 2.1.11PACh. 2 - Prob. 2.1.12PACh. 2 - Prob. 2.1.13PACh. 2 - Prob. 2.1.14PACh. 2 - Prob. 2.2.1RQCh. 2 - Prob. 2.2.2RQCh. 2 - Prob. 2.2.3PACh. 2 - Prob. 2.2.4PACh. 2 - Prob. 2.2.5PACh. 2 - Prob. 2.2.6PACh. 2 - Prob. 2.2.7PACh. 2 - Prob. 2.2.8PACh. 2 - Prob. 2.2.9PACh. 2 - Prob. 2.2.10PACh. 2 - Prob. 2.2.11PACh. 2 - Prob. 2.2.12PACh. 2 - Prob. 2.2.13PACh. 2 - Prob. 2.2.14PACh. 2 - Prob. 2.2.15PACh. 2 - Prob. 2.3.1RQCh. 2 - Prob. 2.3.2RQCh. 2 - Prob. 2.3.3RQCh. 2 - Prob. 2.3.4RQCh. 2 - Prob. 2.3.5RQCh. 2 - Prob. 2.3.6RQCh. 2 - Prob. 2.3.7PACh. 2 - Prob. 2.3.8PACh. 2 - Prob. 2.3.9PACh. 2 - Prob. 2.3.10PACh. 2 - Prob. 2.3.11PACh. 2 - Prob. 2.3.12PACh. 2 - Prob. 2.3.13PACh. 2 - Prob. 2.3.14PACh. 2 - Prob. 2.3.15PACh. 2 - Prob. 2.3.16PA
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