Pounds of beef per worker per hour Pounds of chicken per worker per hour Boston 3 3 Chicago 2 1 What is the opportunity cost of Beef in Boston and what is that cost in Chicago? Which city had absolute advantage in production of Chicken? Why? Support your answer with numbers. Which city had comparative advantage in production of Chicken? Why? Support your answer with numbers.

Pounds of beef per worker per hour Pounds of chicken per worker per hour Boston 3 3 Chicago 2 1 What is the opportunity cost of Beef in Boston and what is that cost in Chicago? Which city had absolute advantage in production of Chicken? Why? Support your answer with numbers. Which city had comparative advantage in production of Chicken? Why? Support your answer with numbers.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 6PA

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Similar questions

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.
How does comparative advantage lead to gains 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?
Under what conditions does comparative advantage lead to gains from trade?