C & D please WORKING WITH NUMBERS AND GRAPHS1. Using the data in the accompanying table, answer thefollowing questions:Points onProductionPossibilitiesFrontierCanadaItalya. For which good does Canada have a comparativeadvantage?b. For which good does Italy have a comparativeadvantage?Good X Good YGood X Good YA150901002550603060C50120180c. What might be a set of favorable terms of trade for theD75two countries?d. Prove that both countries would be better offin the specialization-trade case than in theno-specialization-no-trade case.

The comparative advantage(CA) of the two countries needs to be found. For country-C, to produce…

c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization-trade case than in the no-specialization-no-trade case.

c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization-trade case than in the no-specialization-no-trade case.

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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In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
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