Suppose we have the following information about the productivity of industry in Japan and Korea. The data are the units of output per hour of work. Steel Televisions Japan 6 3 Korea 8 2 A Japanese worker can produce 6 units of steel or 3 televisions per hour. A Korean worker can produce 8 units of steel or 2 televisions per hour. Plot the production possibilities frontier for each country, assuming each country has only one worker and the worker works only one hour. To plot the frontier, plot the end points and connect them with a line. For example, Japan can produce 6 units of steel with its worker or 3 televisions. It can also allocate 1/2 hour to the production of each and get 3 units of steel and 1 1/2 televisions. a) What is the range of prices at which each country would be willing to exchange?
1.Suppose we have the following information about the productivity of industry in
Japan and Korea. The data are the units of output per hour of work.
Steel Televisions
Japan 6 3
Korea 8 2
A Japanese worker can produce 6 units of steel or 3 televisions per hour. A Korean worker
can produce 8 units of steel or 2 televisions per hour. Plot the production possibilities frontier
for each country, assuming each country has only one worker and the worker works only one
hour. To plot the frontier, plot the end points and connect them with a line. For example, Japan
can produce 6 units of steel with its worker or 3 televisions. It can also allocate 1/2 hour to
the production of each and get 3 units of steel and 1 1/2 televisions.
a)
What is the range of prices at which each country would be willing to exchange?
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