Answered: In the United States, one worker can…

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 3SCQ: In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine....

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In the United States, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. In the United Kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day.

Show by way of calculations:

a) The United States has absolute advantage in the production of?

b) The United Kingdom has a comparative in the production of?

c) If trade occurs between the United States and the United Kingdom, American firms will specialize in the production of?

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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