Answered: Which country has an absolute advantage…

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...

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. Which country has an absolute advantage in the production of fruit? Which country
has an absolute advantage in the production of timber?
b. Which country has a comparative advantage in the production of fruit? of timber?
c. Sketch the PPF’s for both countries.
d. Assuming no trading between the two, if both countries wanted to have equal
numbers of feet of timber and baskets of fruit, how would they allocate workers to
the two sectors?
e. Show that specialization and trade can move both countries beyond their PPF’s.

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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