Precious Metals And Human Resources

1599 Words7 Pages
Part1 Precious Metals ability Precious Metals Price Soybeans ability Soybeans Price China 100 40 1 5 U.S. 1 40 500 5 (1) According to this case China can product 100 kilos of precious metals and 1 kills of soybeans per day and the U.S. can produce 1 kilo of Precious Metals and 500 kilos of soybeans per day. We can easily calculate that the opportunity cost for China to only produce 1 kilo precious metals is 1/100=0.01 kilo of soybeans. The U.S.’s opportunity cost for only product 1 kilo precious metals is 500/1=500 kilos of soybeans per kilo. Compare with these two number we can see there is a huge difference between China and the U.S.’s cost for producing precious metals, which is 500/0.01=50000 times. In another word, China have a much lower cost for them to produce the precious metals than the U.S. Using the same method, we can know that the cost of producing 1 kilo soybeans in China equal to 100/1=100 kilos of precious metals. However, in the U.S. it only cost them 1/500=0.002 kilo of precious metals to produce one kilo of soybeans; it means the U.S. has a much lower cost for them to produce the soybeans than China. i. According to the analysis provided above, we can know that China has a much lower cost to produce the precious metals and a super high cost for them to grow soybeans. It is better for China to focus on produce the precious metals instead of growing soybeans. That is why China should buy soybeans from the country that have a lower cost to growing them,
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