France and Tunisia both have Mediterraneanclimates that are excellent for producing/harvestinggreen beans and tomatoes. In France it takes two hoursfor each worker to harvest green beans and two hours toharvest a tomato. Tunisian workers need only one hourto harvest the tomatoes but four hours to harvest greenbeans. Assume there are only two workers, one in eachcountry, and each works 40 hours a week.a. Draw a production possibilities frontier for eachcountry. Hint: Remember the productionpossibility frontier is the maximum that allworkers can produce at a unit of time which, inthis problem, is a week.b. Identify which country has the absoluteadvantage in green beans and which country hasthe absolute advantage in tomatoes.c. Identify which country has the comparativeadvantage.d. How much would France have to give up interms of tomatoes to gain from trade? How muchwould it have to give up in terms of green beans?
France and Tunisia both have Mediterranean
climates that are excellent for producing/harvesting
green beans and tomatoes. In France it takes two hours
for each worker to harvest green beans and two hours to
harvest a tomato. Tunisian workers need only one hour
to harvest the tomatoes but four hours to harvest green
beans. Assume there are only two workers, one in each
country, and each works 40 hours a week.
a. Draw a
country. Hint: Remember the production
possibility frontier is the maximum that all
workers can produce at a unit of time which, in
this problem, is a week.
b. Identify which country has the absolute
advantage in green beans and which country has
the absolute advantage in tomatoes.
c. Identify which country has the comparative
advantage.
d. How much would France have to give up in
terms of tomatoes to
would it have to give up in terms of green beans?
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