PISTACHOS (Milions of pounds)#1410BPPFYosemite02 46 83 10 12 14ALMONDS (Millions of pounds)Yosemite has a comparative advantage in the production ofproduction ofPISTACHOS (Milions of pounds)161410PPF2410 12ALMONDS (Milions of pounds)Rainier•a comparative advantage. After specialization, the two countries can produce a total ofmillion pounds of almonds.?, while Rainier has a comparative advantage in theSuppose that Yosemite and Rainier specialize in the production of the goods in which each hasmillion pounds of pistachios and

Let us first know how one can compute the opportunity cost (OC) in the production of both…

PISTACHOS (Milions of pounds) 18 12 PPF 10 D 0 02 4 6310 12 34 16 ALMONDS (Millions of pounds) Yosemite has a comparative advantage in the production of production of PISTACHOS (Milions of pounds) 10 PPF 2 410 12 14 10 ALMONDS (Milions of pounds) , while Rainier has a comparative advantage in the Suppose that Yosemite and Rainier specalize in the production of the goods in which each has million pounds of pistachios and a comparative advantage. After specialization, the two countries can produce a total of

PISTACHOS (Milions of pounds) 18 12 PPF 10 D 0 02 4 6310 12 34 16 ALMONDS (Millions of pounds) Yosemite has a comparative advantage in the production of production of PISTACHOS (Milions of pounds) 10 PPF 2 410 12 14 10 ALMONDS (Milions of pounds) , while Rainier has a comparative advantage in the Suppose that Yosemite and Rainier specalize in the production of the goods in which each has million pounds of pistachios and a comparative advantage. After specialization, the two countries can produce a total of

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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Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram onto a sheet of paper and then add a foreign county as a third agent. Draw a rough sketch of the flows of imports, exports, and the payment for each on your diagram.
In its recent report, The Conference Boards Global Economic Outlook 2015, updated November 2014 (http://www.conference-board.org/data/ globaloutlook.cfm), projects Chinas growth between 2015 and 2019 to be about 5.5%. International Business Times (http//www.ibtimes.com/us-exports-china-have rown-294-over-past-decade- 1338693) reports that China is the United States third largest export market, with exports to China growing 294 over the last ten years. Explain what impact China has on the U.S. economy.
Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?
Are differences in geography behind the differences in absolute advantages?
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?
In Germany it takes three workers to make one television and four workers to make one video camera. In Poland It takes six workers to make one television and 12 workers to make one video camera. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the production of video cameras? How can you tell? Calculate the opportunity cost of producing one additional television set in Germany and In Poland. (Your calculation may involve fractions, which Is tine.) Which country has a comparative advantage in the production of televisions? Calculate the opportunity cost of producing one video camera in Germany and in Poland. Which country has a comparative advantage in the production of video cameras? In this example, is absolute advantage the same as comparative advantage, or not? In what product should Germany specialize? In what product should Poland specialize?
Table 33.15 shows how the average costs of production for semiconductors (the chips In computer memories) change as the quantity of semiconductors built at that factory increases. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.