Production Advantage and Opportunity Costs Assume there are two countries, the United States and France, and two goods, automobiles and computers. The table presented below shows the number of automobiles and computers that the United States and France can produce with the same amount of resources. United States France Automobiles 120 100 Computers 60 55 Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer. Which country has a comparative advantage in the production of automobiles? Motivate your answer. Assume these countries trade with one another under the conditions of free trade. Which country will specialise in the production of automobiles? Motivate your answer. If free trade exists between the United States and France, what are the highest and lowest levels for the price of an automobile (expressed in terms of computers)? Motivate your answer by stating which level favours the United States and France.

Production Advantage and Opportunity Costs Assume there are two countries, the United States and France, and two goods, automobiles and computers. The table presented below shows the number of automobiles and computers that the United States and France can produce with the same amount of resources. United States France Automobiles 120 100 Computers 60 55 Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer. Which country has a comparative advantage in the production of automobiles? Motivate your answer. Assume these countries trade with one another under the conditions of free trade. Which country will specialise in the production of automobiles? Motivate your answer. If free trade exists between the United States and France, what are the highest and lowest levels for the price of an automobile (expressed in terms of computers)? Motivate your answer by stating which level favours the United States and France.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter34: World Trade Equilibrium

Section: Chapter Questions

Problem 5E

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scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
Comparative and absolute advantage Elijah and Aneesha are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of squash and maize each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing squash or maize or to produce squash on some of the land and maize on the rest. Squash Maize (Pounds per acre) (Pounds per acre) Elijah 12 3 Aneesha 18 6 On the following graph, use the blue line (circle symbol) to plot Elijah's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF. Elijah's PPF Aneesha's PPF 0 90 180 270 360 450 540 630 720 810 900 180 162 144 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Questions 1-8. Use the information in the following table on labor productivities (output per hour) in France and Germany to answer the following questions. Output per hour cheese Wine Labor Endowment O Cheese only O Wine only 1. Which good does France have an absolute advantage in? Both cheese and wine France 2 kg 2.5 bottle 100 hours ONeither cheese nor wine Germany 1 kg 5 bottles 100 hours
The following table shows the total production that can be produced by two countries at 100 workers. Countries Corn production (bushels) 350 Oil production (barrels) Saudi Arabia 500 United States 300 450 a) Which country has an absolute advantage in the production of oil and corn? b) Calculate the opportunity cost of producing one barrel of oil and one bushel of corn in each country. c) According to the principle of comparative advantage, which country should specialize in producing of oil and corn? d) Identify which country should import corn and oil e) When import greater is in a country that can increase level of competition between for local and foreign country, discuss FIVE (5) tools how government can protect local industry from foreign competition.
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…
Two neighboring island nations, Seychelles and Mauritius, produce iPad's, coffee, or a combination of both. Suppose that they each have 4 million labor hours available per week for production. The following table gives the amount of each product that can be produced using one hour of labor: Country Mauritius Seychelles Mauritius' opportunity cost of produing 1 iPad is iPads (per hour of labor) 12 of coffee. Therefore, 8 Initially, suppose Mauritius uses 1 million hours per week to produce iPads and 3 million hours per week to produce coffee, while Seycheles uses 3 million hours of labor per week to produce iPads and 1 million hours per week to produce coffee. Consequently, Mauritius produces 12 million iPads and 72 million pounds of coffee, and Seychelles produces 24 million iPads and 32 million pounds of coffee. Assume there are no other countries willing to trade with them. So, if Mauritius and Seychelles don't trade with each other, they can only consume what they can produce using…
YUGD KCQ 1 Economics 1A (page 3 of 10) - Google Chrome mancosaconnect.ac.za/mod/quiz/attempt.php?attempt=1022248&cmid=284826&page=2 MANCOSA Study the following diagram and answer the question that follows: Submarines C d b e Type here to search a Galaxy Note20 Ultra 5G 9 The production of Od submarines and Oa hospitals... O A. Is productively inefficient given the available resources. B. Is productively efficient given the available resources. C. Is productively impossible given the available resources. D. Increases the available resources. Hospitals h св D
Consider two neighboring island countries called Arcadia and Euphoria. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Arcadia Euphoria Rye (Bushels per hour of labor) 8 5 Jeans (Pairs per hour of labor) 16 20 Initially, suppose Arcadia uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Arcadia produces 8 million bushels of rye and 48 million pairs of jeans, and Euphoria produces 15 million bushels of rye and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. of jeans, and…
The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same quantity of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. Answer the questions below and show calculations where appropriate. Canada India Good A 600 500 Good B 950 1200 Draw a straight-line PPF graph for Canada. Draw a straight-line PPF graph for India. Which country has the comparative advantage in good A? In good B? Explain. What is India’s marginal opportunity cost of producing good A? Good B? Based on the data given, what is the terms of trade range for good A in terms of units of good B?
What is absolute advantage? What is comparative advantage?
What is comparative advantage?
Consider two neighboring island countries called Dolorium and Bellissima. They each have 4 million labor hours available per month that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Rye (Bushels per hour of labor) Jeans (Pairs per hour of labor) Dolorium 8 32 Bellissima 12 24 Initially, suppose Bellissima uses 1 million hours of labor per month to produce rye and 3 million hours per month to produce jeans, while Dolorium uses 3 million hours of labor per month to produce rye and 1 million hours per month to produce jeans. Consequently, Dolorium produces 24 million bushels of rye and 32 million pairs of jeans, and Bellissima produces 12 million bushels of rye and 72 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye…