Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 9, Problem 9.2CTE
To determine
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Comparative advantage is an important concept to explain how economies work. Because of comparative advantage, it is possible for people to use their skills and time productively even if they are not the best at something. To help illustrate the usefulness of this concept:
Think of an example (work, family chores, school projects, etc.) where you might not have an absolute advantage at something, but you do have a comparative advantage. By this, I mean that you might not be the fastest or the best at a particular job. Other employees, family members, etc. may do the job quicker or better than you could. But their opportunity cost was high, meaning they had something more necessary for them to do, so it made sense for you to do this job.
Explain how this was an example of you having a comparative advantage but not an absolute advantage.
Did you (and the others in your example) specialize according to comparative advantage? What job(s) did you do? What did other people do?
Did this…
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…
Do you have an absolute or comparative advantage in doing something over someone else? Explain in a paragraph of 3 to 5 sentences.
Chapter 9 Solutions
Microeconomics (7th Edition)
Ch. 9 - Prob. 9.1.1RQCh. 9 - Prob. 9.1.2RQCh. 9 - Prob. 9.1.3PACh. 9 - Prob. 9.1.4PACh. 9 - Prob. 9.1.5PACh. 9 - Prob. 9.2.1RQCh. 9 - Prob. 9.2.2RQCh. 9 - Prob. 9.2.3PACh. 9 - Prob. 9.2.4PACh. 9 - Prob. 9.2.5PA
Ch. 9 - Prob. 9.2.6PACh. 9 - Prob. 9.2.7PACh. 9 - Prob. 9.2.8PACh. 9 - Prob. 9.2.9PACh. 9 - Prob. 9.3.1RQCh. 9 - Prob. 9.3.2RQCh. 9 - Prob. 9.3.3RQCh. 9 - Prob. 9.3.4RQCh. 9 - Prob. 9.3.5PACh. 9 - Prob. 9.3.6PACh. 9 - Prob. 9.3.7PACh. 9 - Prob. 9.3.8PACh. 9 - Prob. 9.3.9PACh. 9 - Prob. 9.3.10PACh. 9 - Prob. 9.3.11PACh. 9 - Prob. 9.3.12PACh. 9 - Prob. 9.3.13PACh. 9 - Prob. 9.3.14PACh. 9 - Prob. 9.4.1RQCh. 9 - Prob. 9.4.2RQCh. 9 - Prob. 9.4.3PACh. 9 - Prob. 9.4.4PACh. 9 - Prob. 9.4.5PACh. 9 - Prob. 9.4.6PACh. 9 - Prob. 9.4.7PACh. 9 - Prob. 9.4.8PACh. 9 - Prob. 9.4.9PACh. 9 - Prob. 9.4.10PACh. 9 - Prob. 9.4.11PACh. 9 - Prob. 9.4.12PACh. 9 - Prob. 9.4.13PACh. 9 - Prob. 9.4.14PACh. 9 - Prob. 9.5.1RQCh. 9 - Prob. 9.5.2RQCh. 9 - Prob. 9.5.3RQCh. 9 - Prob. 9.5.4PACh. 9 - Prob. 9.5.5PACh. 9 - Prob. 9.5.6PACh. 9 - Prob. 9.5.7PACh. 9 - Prob. 9.5.8PACh. 9 - Prob. 9.5.9PACh. 9 - Prob. 9.5.10PACh. 9 - Prob. 9.1CTECh. 9 - Prob. 9.2CTECh. 9 - Prob. 9.3CTE
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Similar questions
- Is the following statement true or false? Please explain. "Everyone has a comparative advantage."arrow_forwardGive three examples of trade in servieces and explain how comparative advantage may play a role in them. Do you think there are other factors at work than comparative advantage?arrow_forwardSuppose the following table shows the number of labor hours needed to produce airplanes and automobiles in the United States and South Korea, but one of the numbers is unknown. Number of Hours to produce One Airplane Number of Hours to Produce One Auto South Korea 2000 ? United States 800 10 Without knowing the number of labor hours required to produce an auto in South Korea, you can’t figure out which country has the comparative advantage in which good. Can you give an example of a number for the empty cell of the table that would give the United States the comparative advantage in the production of airplanes? What about South Korea? Who has the absolute advantage in the production of airplanes? What about autos? What exact number would you have to place in the empty cell of the table for it to be impossible that trade between the United States and South Korea could benefit both nations?arrow_forward
- Robin and Betty can each pick mangoes and oranges. The following table summarises the time it takes each to perform each task. Time to pick 1kg of mangoes Time to pick 1kg of oranges Robin 40 minutes 10 minutes Betty 30 minutes 20 minutes Based on this information, has a comparative advantage in picking and an absolute advantage in picking (Need help? Read chapter 1.3 of the textbook, here: https://playconomics.com/textbooks/view/playconomics4-2019t3/part1/ch1/s3) Robin; oranges; oranges Robin; mangoes; oranges Betty; mangoes; oranges None of these. Betty; oranges; mangoesarrow_forwardUsing the information provided in the table below, answer the following questions. Country A Country BTables 4 7Desk 1 2b) Answer the following questions:i. Which country has the Absolute advantage in tables? ii. Which country has the Absolute advantage in desk? iii. Which country has the Comparative Advantage in tables? iv. Which country has the Comparative advantage in desk? v. If each country has 10 workers who can produce either tables or chairs, draw the PPF of tables and desk for Country A and do the same for Country B.arrow_forwardWhich of the following is not true about the differences between comparative advantage and absolute advantages? While it is possible to achieve gains from trade if the country does not have a comparative advantage in the production of any goods, it is not possible to achieve gains from trade if the country does not have an absolute advantage in the production of any goods. Comparative advantage emphasizes the relative cost differences based on opportunity costs, while absolute advantage emphasizes absolute costs. In order to achieve gains from trade, specialization should be based on comparative advantage and not absolute advantage. In the two nation, two good model, we will always see that a country will have a comparative advantage in at least one good.arrow_forward
- The following table shows the production of cows’ milk and potatoes per unit of input in the hypothetical countries of St. Claire and St. Paul. Use the following table to answer the questions. St. Claire St. Paul Cow’s Milk 100 liters 50 liters Potatoes 150 liters 60 kilos a) What is the opportunity cost of producing one liter of cows’ milk in St. Paul? b) Which country has the comparative advantage in the production of cows’ milk? c) What is the opportunity cost of producing one kilo of potatoes in St. Claire?arrow_forwardWhat does it mean to have an absolute advantage? What does it mean to have a comparative advantage?arrow_forwardThe principle of comparative advantage does not provide answers to certain questions. One of those questions is Do specialization and trade benefit more than one party to a trade? Is it absolute advantage or comparative advantage that really matters? How are the gains from trade shared among the parties to a trade? Is it possible for specialization and trade to increase total output of traded goods?arrow_forward
- Suppose that each U.S. worker can produce 8 units of food or 2 units of clothing daily. In Fredonia, which has the same number of workers, each worker can produce 7 units of food or 1 unit of clothing daily. Why does the United States have an absolute advantage in both goods? Which country enjoys a comparative advantage in food? Why? please simple easy explanation with simple example to understandarrow_forwardWhat is the doctrine of comparative advantage? Provide an example of a particular country’s comparative advantage.arrow_forward
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