Look at F where it says Liz has comparative advantage. Why is it that she has comparative advantage over mike in cleaning windows when mike has comparative advantage in picking up leaves? What’s the difference?
Q: Suppose that France and Germany both produce wine and schnitzel. The table below shows combinations…
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A: Theory of Comparative Advantage -:…
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A: An individual, firm, area, or country has an absolute advantage if it can generate more goods or…
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A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: c. What might be a set of favorable terms of trade for the two countries? d. Prove that both…
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A: Absolute advantage occurs when a country can produce more of a good at same cost than other country…
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A: Comparative advantage alludes to the capacity to deliver labor and products at a lower opportunity…
Q: c ) After trade , if Canada still wishes to have 90 bushels of wheat , how many more DVDs could it…
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Q: A) With the following data decide which country has comparative advantage for which. Show your math.…
A: Comparative advantage enables us to find out, which nation produces the good at the lowest possible…
Q: A typical Australian farmer can produce 8000 lbs of wheat or 500 lbs of potatoes per year. A typical…
A: The answer is as follows:-
Q: 06. If Portugal has a total of 180 man-hours of resources available for production, while England…
A: Portugal:Opportunity cost of producing wine=3090=13Opportunity cost of producing cloth=9030=3
Q: try A having comparative advantage in wheat and country B in térs, according to the…
A: Disclaimer- “Since you have asked multiple question, we will solve the only first question for you…
Q: In theory of comparative advantage, which statement is correct O a a country should produce all…
A: The theory of comparative advantage in international trade is given by David Recardo.
Q: Determine which country has a comparative advantage in each good . b) If Country A and Country B…
A: Unit labor Requirements Country A Country B Steel 4 4 Oil 2 5
Q: The outputs per laborer per day in the production of computers and autos in Nation 1 and in Nation 2…
A: Opportunity Cost refers to the next best alternative forgone
Q: The economic basis for trade is O none of these. O speculative attacks. O insourcing. O comparative…
A: The trade between countries depends upon the opportunity cost of producing goods. With international…
Q: 3. Absolute and comparative advantage Consider two neighboring island countries, Charisma and…
A: Total Number of hours present with both the nations : 72000 Hours Given labor hours required for…
Q: Suppose that France and Germany both produce wine and schnitzel. Thne table below snows combinations…
A: The exchange of goods and services across borders is known as the international trade. International…
Q: What are the sources of Hong Kong's comparative advantage? Explain.
A: Comparative Advantage: The comparative advantage arises when a product is being produced at a lower…
Q: Use the following data to explain the difference between absolute advantage (SMITH) and comparative…
A: Absolute advantage refers to the ability to produce more goods using same resources or same quantity…
Q: . Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of…
A: As given above Portugal has three times more labor resource than england.
Q: 56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 - -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 64…
A: Opportunity cost refers to the loss due to giving up the best alternative in making a decision.
Q: Suppose that two countries have the following production possibilities: Smartphones Refrigerators…
A: A country has an absolute advantage in production of that good that it can produce in a larger…
Q: Explain the difference between absolute and comparative advantage in relation to trade and give an…
A: Absolute advantage and comparative advantage are two important ideas in worldwide business and…
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A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Are the following statemen ts true or false? Explain ineach case.a. ''1Wo countries can achieve…
A: NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: 42 42 36 36 PPF 30 30 24 24 18 PPF 18 12 12 5 -- -- 6. 0 6 12 18 24 30 36 42 48 6 12 18 24 30 36 42…
A: Comparative advantage is an effective tool or method to make international trade to be beneficial…
Q: norr mic ces, can a nation's comparative advantage change over time? What factors would make it…
A: If a country's opportunity cost is lower than that of other countries, it has a comparative…
Q: Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage…
A: Comparative Advantage is defined as a country's ability to produce a good or a service at a lower…
Q: Refer to Table 1. Which country has the comparative advantage in the production of burgers? a.…
A: The comparative advantage for any country is its ability to produce a particular good and service at…
Q: Suppose that Austria and Belgium have the unit labor requirements for producing steel and brooms…
A: The free trade refers to the free movement of goods and services from one country to other country.…
Q: When countries specialize in producing goods for which they have a comparative advantage and then…
A: The ability to create goods and services at a lower opportunity cost, not necessarily at a higher…
Q: Specialization will increase output when it is based on: absolute advantage. O comparative…
A: Absolute advantage refers to a country’s capacity to produce a certain good more efficiently than…
Q: Explain how the gains from trade followfrom comparative advantage.
A: Comparative advantage defines a circumstance in which a product or service may be created by a…
Q: Suppose there are two countries Peru and Japan that produces 7,523 units ofFood or 17,853 units of…
A: Comparative advantage tells us that if a nation has lesser production capacity(is less efficient) in…
Q: A) Which producer has the comparative advantage in producing puzzles? Geppetto or Lewis B) Which…
A: An economic agent is said to have a comparative advantage in the production of a good or service if…
Q: The US, Mexico, and Canada all produce steel and corn. The table below shows the total production…
A: The joint possibility curve shows the combined possibility curve of all three individuals for the…
Q: Eggs Eggs 40 Johnny Frankie 30 20 10 RF 10 15 Milk 20 40 Milk Without specialization, Johnny…
A: When two individuals, firms, or countries make an exchange of goods and services using their…
Q: You have a comparative advantage if you can complete a task: at a higher opportunity cost than…
A: Comparative advantage is when a producer is able to produce at a lower opportunity cost than any…
Q: With respect to Table 2.5, indicate in each case the commodity in which each nation has a…
A: 1) Absolute advantage in one commodity implies which country can produce more of the great with the…
Q: Calculate and tell which country has comparative advantage in production of shoes? Calculate and…
A: Comparative advantage arises when the country produces a good at a lower opportunity cost than the…
Q: (d) Which country has the comparative advantage in food? In fuel? Explain. (e) Which good(s) should…
A: d. The comparative advantage is the ability of the economy to produce a commodity at the least…
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- . Diego and Darnell are roommates. They spend mostof their time studying (of course), but they leavesome time for their favorite activities: making pizzaand brewing root beer. Diego takes 4 hours to brewa gallon of root beer and 2 hours to make a pizza.Darnell takes 6 hours to brew a gallon of root beerand 4 hours to make a pizza.a. What is each roommate’s opportunity cost ofmaking a pizza? Who has the absolute advantagein making pizza? Who has the comparativeadvantage in making pizza?b. If Diego and Darnell trade foods with each other,who will trade away pizza in exchange for rootbeer?c. The price of pizza can be expressed in terms ofgallons of root beer. What is the highest price atwhich pizza can be traded that would make bothroommates better off? What is the lowest price?Explain.When two individuals produce eff iciently and thenmake a mutually beneficial trade based on com para~tive advantage,a. they both obtain consumption outside their productionpossi bil ities frontier.b. they both obtain consumption inside their p rod u c ~tion possi bil ities frontier.c. one individual consumes inside her productionpossibilit ies frontier, while the other consumesoutside hers.d. each ind ividual consumes a poi nt on her ownproduction possibi lities frontier.Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
- 1.Under what conditions is the production possi bilities frontier linear rather than bowed out? 2.Explain how absolute advantage and compara-tive advantage differ. 3.Give an example in which one person has anabsolute advantage in doing something butanother person has a comparative advantage. 4.Is basoute advantage or comparative advantage more important for trade? Explain yourreasoning using the example in your answer toQuestion 3..If two parties trade based on comparativeavantage an ot gain, in wat range mustthe price of the trade lie?.Will a nation tend to export or import goods forwhich it has a comparative advantage?The first principle of economics in Chapter 1 is thatpeople face trade-offs. Use a production possibilitiesfrontier to illustrate society’s trade-off between two“goods”—a clean environment and the quantity ofindustrial output. What do you suppose determinesthe shape and position of the frontier? Show whathappens to the frontier if engineers develop anew way of producing electricity that emits fewerpollutantsscenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
- The first principle of economics in Chapter 1 is thatpeople face trade-offs. Use a production possibilitiesfrontier to illustrate society’s trade-off between two“goods”—a clean environment and the quantity ofindustrial output. What do you suppose determinesthe shape and position of the frontier? Show whathappens to the frontier if engineers develop anew way of producing electricity that emits fewerpollutants cars. In an hour, Larry can either mow one lawn orwash one car; Moe can either mow one lawn or washtwo cars; and Curly can either mow two lawns orwash one car.a. Calculate how much of each service is producedin the following scenarios, which we label A, B,C, and D:• All three spend all their time mowing lawns. (A)• All three spend all their time washing cars. (B)• All three spend half their time on each activity. (C)• Larry spends half his time on each activity, whileMoe only washes cars and Curly only mowslawns. (D)b. Graph the production possibilities frontier for thiseconomy.…A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?The following table describes the productionpossibilities of two cities in the country of Baseballia:Pairs of RedSocks per Workerper HourPairs of WhiteSocks per Workerper HourBoston 3 3Chicago 2 1a. Without trade, what is the price of white socks (interms of red socks) in Boston? What is the price inChicago?b. Which city has an absolute advantage in theproduction of each color sock? Which city has acomparative advantage in the production of eachcolor sock?c. If the cities trade with each other, which color sockwill each export?d. What is the range of prices at which mutuallybeneficial trade can occur?
- 1. The countries France and Italy produce Perfumes and Leather Coats using only labor as an input. AvailableLabor for France and Italy is 3000 and 1000 respectively. Unit of labor per Leather Coat in France is 6 units and inItaly are 2 units. France needs 2 units of labors to produce 1 bottle of Perfume and Italy needs 4 unit of labor. a) Draw the Production Possibility Curve by using relevant information. b) Which country has the comparative advantage in producing Perfume?Two countries, Korea and Vietnam, are engaging in international trade.They produce two goods: automobiles and cloth. We observe a relativeabundance of cheap labor in Vietnam and a relative abundance of capitalin South Korea. a. Assume that automobiles are capital-intensive and cloth are cheaplabor-intensive. Using the Hecksher-Ohlin theory, explain what willhappen in trade between these two countries, in terms of export andimport. c. Draw a graph that shows the above situation in South Korean economy with a P P F and two relative prices (one before trade and theother after trade). The quantity of automobiles (QAuto) is on thehorizontal axis and the quantity of cloth (QCloth) is on the verticalaxis.Pat and Chris can spend their nonleisure time working either in the marketplace or at home (preparing dinner, taking care of children, doing repairs). In the marketplace, Pat earns a higher wage, wp= $20, than Chris, wc= $10. a. Show their combined budget constraint and identify who has the comparative in working in the marketplace and who has a comparative advantage in working at home. b. Discuss how living together can affect how much each of them works in the marketplace. Can you think of a shock that would significantly affect their choices? Briefly explain the shock and its effects. Illustrate your answer with a numerical example different from the textbook solution.