7.) Who discovered the law of comparative advantage? a.) David Ricardo b.) Robert Torrents c.) David Autor d.) Robert Lucas 8.) Suppose that Bob can produce hamburgers and pasta and has 10 hours of time. Bob can make 10 hamburgers in 1 hour and 2 plates of pasta in one hour. What is Bob’s opportunity cost of producing hamburgers? a.) 1/5 b.) 2/5 c.) 3/5

7.) Who discovered the law of comparative advantage? a.) David Ricardo b.) Robert Torrents c.) David Autor d.) Robert Lucas 8.) Suppose that Bob can produce hamburgers and pasta and has 10 hours of time. Bob can make 10 hamburgers in 1 hour and 2 plates of pasta in one hour. What is Bob’s opportunity cost of producing hamburgers? a.) 1/5 b.) 2/5 c.) 3/5

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 6PA

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Similar questions

Is it possible to have a comparative advantage in the production of a good but not to have an absolute advantage? Explain.
What is comparative advantage?
What is absolute advantage? What is comparative advantage?
Suppose that Spain and Greece both produce wine and olive oil. The following table shows combinations of the goods that each country can produce in a week (in thousands of liters). Spain Greece Wine Olive Oil Wine Olive Oil 0 16 0 30 1 12 1 24 2 8 2 18 3 4 3 12 4 0 4 6 -- -- 5 0 a. Who has a comparative advantage in producing wine? Who has a comparative advantage in producing olive oil? Explain b. Suppose that Spain is currently producing 1000 liters of wine and 12000 liters of olive oil per week and Greece is currently producing 3000 liters of wine and 12000 liters of olive oil per week. Demonstrate that Spain and Greece can both be better off if they specialise in producing only one good and then engage in trade.
Refer to the graph for the following questions. 1. Which country has the absolute advantage in production of Good A? A. Country Y B. Neither Country has an absolute advantage of producing Good A. C. Country X 2. Which Country has the comparative advantage in production of Good A? A. Neither Country has a comparative advantage in producing Good A. B. Country X C. Country Y 3. Which Country has the com advantage in production of Good B? A. Country X B. Country Y C. Neither country has a comparative advantage in producing Good B.
8. An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes. a. Who has the absolute advantage in coffee? Explain. b. Who has the comparative advantage in coffee? Explain. c. If the two countries specialize and trade with each other, who will import coffee? Explain. d. Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade
3 1. Define comparative cost advantage. Suppose there are two persons in the society named Anika and Abrar. Both of them produce a particular quantity of two goods i.e., bread and ice-cream. Given terms of trade 6:10, do they gain out of trade? Explain.
2. An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes. a) Who has the absolute advantage in coffee? Explain. b) Who has the comparative advantage in coffee? Explain. c) If the two countries specialize and trade with each other, who will import coffee? Explain. d) Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.
Course: Macroeconomics Suppose that the USA can make 15,000,000 cars or 20,000,000 bottles of wine with one year's worth of labor. France can make 10,000,000 cars or 18,000,000 bottles of wine with one year's worth of labor. From these numbers, we can conclude: Which country has the absolute advantage in producing cars? Which country has the absolute advantage in producing wine? Which country has the comparative advantage in producing cars? Which country has the comparative advantage in producing wine? (Show opportunity cost calculations.)