Table 3-4 Alberta Manitoba Labour hours needed to make one unit Baskets 6 3 Birdhouses 2 4 Amount produced in 24 hours: Baskets Birdhouses 4 12 6 Refer to the table 3-4. Who has an absolute advantage in the production of each good? Select one: a Alberta has an absolute advantage in birdhouses, and Manitoba has an absolute advantage in baskets Ob Alberta has an absolute advantage in both goods, and Manitoba has an absolute advantage in neither good Oc Alberta has an absolute advantage in baskets, and Manitoba has an absolute advantage in birdhouses Od Alberta has an absolute advantage in neither good, and Manitoba has an absolute advantage in both goods

Table 3-4 Alberta Manitoba Labour hours needed to make one unit Baskets 6 3 Birdhouses 2 4 Amount produced in 24 hours: Baskets Birdhouses 4 12 6 Refer to the table 3-4. Who has an absolute advantage in the production of each good? Select one: a Alberta has an absolute advantage in birdhouses, and Manitoba has an absolute advantage in baskets Ob Alberta has an absolute advantage in both goods, and Manitoba has an absolute advantage in neither good Oc Alberta has an absolute advantage in baskets, and Manitoba has an absolute advantage in birdhouses Od Alberta has an absolute advantage in neither good, and Manitoba has an absolute advantage in both goods

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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France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week. Draw a production possibilities frontier for each country. Hint: Remember the production possibility frontier is the maximum that all workers can produce at a unit of time which, in this problem, is a week. Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes. Identity which country has the comparative advantage. How much would France have to give up In terms of tomatoes to gain from trade? How much would it have to give up in terms of green beans?
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?
What is absolute advantage? What is comparative advantage?
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?
What is comparative advantage?