Use the information in the following table on labor productivities in France and Germany to answer questions a through f. Output per hour worked Cheese Cars France 4 kilograms 0.5 Germany 2 kilograms 1 a. The absolute advantage in cheese is held by France and the absolute advantage in cars is held by Germany b. The relative price of cheese in France is 0.125 cars (round to three decimal places) and the relative price of cheese in Germany is 0.5 cars (round to one decimal place). c. The opportunity cost of cheese in France is 0.125 cars (round to three decimal places) and the opportunity cost of cheese in Germany is 0.5 cars (round to one decimal place). d. The comparative advantage in cheese is held by France and the comparative advantage in cars is held by Germany e. The trade price of cheese has an upper bound of 0.5 cars (round to one decimal place) and a lower bound of 0.125 cars (round to three decimal places). f. Assume France has 10 hours it can allocate toward the production of cheese and cars. Carefully follow the steps below to draw the required objects on the figure to the right. 1.) Using the line drawing tool, draw France's PPC given the data above. (HINT: start your PPC on the vertical axis at 40.) Properly label your line. 2.) Using the point drawing tool, assume France produces according to its comparative advantage and identify its production point. Label this point A 3.) Using the line drawing tool, given the trade price of cars is five kilograms of cheese per car, draw the trade line showing how France can gain from trade. Properly label your line. Cheese 50- 45- 40+ 35- 30- 25- 20- 15- 10- 5- 0- France Cars 10 Q Q G
Use the information in the following table on labor productivities in France and Germany to answer questions a through f. Output per hour worked Cheese Cars France 4 kilograms 0.5 Germany 2 kilograms 1 a. The absolute advantage in cheese is held by France and the absolute advantage in cars is held by Germany b. The relative price of cheese in France is 0.125 cars (round to three decimal places) and the relative price of cheese in Germany is 0.5 cars (round to one decimal place). c. The opportunity cost of cheese in France is 0.125 cars (round to three decimal places) and the opportunity cost of cheese in Germany is 0.5 cars (round to one decimal place). d. The comparative advantage in cheese is held by France and the comparative advantage in cars is held by Germany e. The trade price of cheese has an upper bound of 0.5 cars (round to one decimal place) and a lower bound of 0.125 cars (round to three decimal places). f. Assume France has 10 hours it can allocate toward the production of cheese and cars. Carefully follow the steps below to draw the required objects on the figure to the right. 1.) Using the line drawing tool, draw France's PPC given the data above. (HINT: start your PPC on the vertical axis at 40.) Properly label your line. 2.) Using the point drawing tool, assume France produces according to its comparative advantage and identify its production point. Label this point A 3.) Using the line drawing tool, given the trade price of cars is five kilograms of cheese per car, draw the trade line showing how France can gain from trade. Properly label your line. Cheese 50- 45- 40+ 35- 30- 25- 20- 15- 10- 5- 0- France Cars 10 Q Q G
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...
Related questions
Question
Transcribed Image Text:Use the information in the following table on labor productivities in France and Germany to answer questions a through f.
Output per hour worked
Cheese
Cars
France
4 kilograms
0.5
Germany
2 kilograms
1
a. The absolute advantage in cheese is held by France
and the absolute advantage in cars is held by Germany
b. The relative price of cheese in France is 0.125 cars (round to three decimal places) and the relative price of cheese in Germany is
0.5 cars (round to one decimal place).
c. The opportunity cost of cheese in France is 0.125 cars (round to three decimal places) and the opportunity cost of cheese in Germany
is 0.5 cars (round to one decimal place).
d. The comparative advantage in cheese is held by France and the comparative advantage in cars is held by Germany
e. The trade price of cheese has an upper bound of 0.5 cars (round to one decimal place) and a lower bound of 0.125 cars (round to
three decimal places).
f. Assume France has 10 hours it can allocate toward the production of cheese and cars. Carefully follow the steps below to draw the
required objects on the figure to the right.
1.) Using the line drawing tool, draw France's PPC given the data above. (HINT: start your PPC on the vertical axis at 40.) Properly label
your line.
2.) Using the point drawing tool, assume France produces according to its comparative advantage and identify its production point. Label
this point A.
3.) Using the line drawing tool, given the trade price of cars is five kilograms of cheese per car, draw the trade line showing how France
can gain from trade. Properly label your line.
Cheese
50
45-
40-
35-
30+
25-
20-
15-
10-
5-
0-
0
France
4
Cars
6
8
S
10
Q
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning