MACROECONOMICS >C< W/MYECONLAB
18th Edition
ISBN: 9781323886038
Author: Pearson
Publisher: Pearson Custom Publishing
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 2.3P
Subpart (a):
To determine
The absolute advantage.
Subpart (b):
To determine
The transfer of land and sacrifice.
Subpart (c):
To determine
The
Subpart (d):
To determine
The consistency with the data.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following table gives recent figures for yield per acre in Illinois and Kansas :
Illinois: WHEAT 48 SOYBEANS 39
Kansas: WHEAT40 SOYBEANS 24
If we assume that farmers in Illinois and Kansas use the same amount of labor , capital , and fertilizer , which state has an absolute advantage in wheat production ? soybean production ?
If we transfer land out of wheat into soybeans , how many bushels of wheat do we give up in Illinois per additional bushel of soybeans produced in Kansas ?
Which state has a comparative advantage in wheat produc tion ? in soybean production ?
The following table gives the distribution of land planted for each state in millions of acres in the same year .
Illinois TOTAL ACRES UNDER TILL 22.9
WHEAT 1.9 ( 8.3 % )
SOYBEANS 9.1 ( 39.7 % )
Kansas TOTAL ACRES UNDER TILL 20.7
WHEAT 11.8 ( 57.0 % )
SOYBEANS1.9 ( 9.2 % )
5. Are these data consistent with your answer to part 3 ? Explain .
Country A Country B
No. of pencils 100 50
produced
pounds of paper
produced 150 150
a)Country A and Country B can both produce paper and pencils, according to the table above and using the same amount of time and resources. Which country has the absolute advantage in producing each good?
choices
Country A has absolute advantage in pencils, but neither country has absolute advantage in paper
Country A has absolute advantage in both
Country B has absolute advantage in both
Country B has absolute advantage in paper, but Country A has absolute advantage in pencils
Neither country has absolute advantage in either good
The following table gives recent figures for yield per acre in Illinois and Kansas :
Illinois: WHEAT 48 SOYBEANS 39
Kansas: WHEAT40 SOYBEANS 24
If we transfer land out of wheat into soybeans , how many bushels of wheat do we give up in Illinois per additional bushel of soybeans produced in Kansas ?
Which state has a comparative advantage in wheat produc tion ? in soybean production ?
The following table gives the distribution of land planted for each state in millions of acres in the same year .
Illinois TOTAL ACRES UNDER TILL 22.9
WHEAT 1.9 ( 8.3 % )
SOYBEANS 9.1 ( 39.7 % )
Kansas TOTAL ACRES UNDER TILL 20.7
WHEAT 11.8 ( 57.0 % )
SOYBEANS1.9 ( 9.2 % )
Are these data consistent with your answer to question 2? Explain .
Knowledge Booster
Similar questions
- Suppose that Ontario and Vermont each produce two goods, maple syrup (M) and hockey sticks (H). The quantities of each good that can be produced by each region in a day are given below: ONTARIO VERMONT GALLONS OF MAPLE SYRUP/DAY 400 1200 HOCKEY STICKS/DAY 200 300 Which region has an absolute advantage in maple syrup production? Which region has an absolute advantage in hockey stick production? Find the opportunity costs of each good for both Ontario and Vermont. c. Should Ontario and Vermont specialize and trade? Which good should be produced by Ontario? Vermont? What are the terms of trade? Use PPCs and CPCs to show that each would be better off through specialization and trade. Of what principle does this question provide an example?arrow_forwardAssume England and Chad can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries. Each farmer in England can produce 10 t of grain or 5 t of dates in a season. Each farmer in Chad can also produce 10 t of grain or 25 t of dates. Please answer the four questions. Which country has the absolute advantage in producing dates? Which country has the absolute advantage in producing grain? Which country has the comparative advantage in producing dates?arrow_forwardMartha and Dave like to make identical tacos and cakes. The time it takes Martha and Dave to make tacos and cakes is given in the table below. Martha Dave Time to make a taco 10 minutes 15 minutes Time to make a cake 20 minutes 30 minutes Which person has an absolute advantage in the production of tacos, and which person has an absolute advantage in the production of cakes?arrow_forward
- In an hour, Mateo can wash 2 cars or mow 1 lawn, and Tyler can wash 3 cars or mow 1 lawn. Who has an absolute advantage in car washing, and who has the absolute advantage in lawn mowing?arrow_forwardKelen and Chris produce rice and wheat. In an hour, Kelen can produce 1 unit of wheat or one unit of rice, while Chris can produce 2 units of wheat and 3 units of rice. They each work 10 hours a day. Who has an absolute advantage in producing wheat? Who has an absolute advantage in producing rice? Explain. Who has comparative advantage in producing wheat? Who has Comparative advantage in producing rice? Draw a production possibilities frontier for Kelen and Chris assuming that each spends same number of hours each day as the other in producing wheat and rice.arrow_forwardConsider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of time available. They can use their time to do one of 2 things: make pancakes or make hamburgers. Bob can make 2 hamburgers in an hour or 1 pancake in an hour. Jake can make 3 pancakes in an hour and 2 hamburgers in an hour. Use this information to answer the following question: Who has absolute advantage in the production of hamburgers and who has absolute advantage in the production of pancakes?arrow_forward
- Suppose that a tailor in Cottonland can sew either 40 cotton shirts or 10 silk shirts per week, and a tailor in Silkland can sew either 18 cotton shirts or 6 silk shirts per week. There are 20 tailors in Cottonland and 20 tailors is Silkland. Answer the following questions: 2.1. What country has the absolute advantage in sewing cotton shirts? What country has the absolute advantage in sewing silk shirts? 2.2. What country has the comparative advantage in sewing cotton shirts? What country has the comparative advantage in sewing silk shirts? Numerically 2.3. If the two countries specialize and produce according to the comparative advantage criterion, how much in terms of cotton and silk shirts each country will produce per week? Fill in the table below with your calculations. Cotton shirts/per week Silk shirts/per week Cottonland Silklandarrow_forward1. Holland and Aruba can produce ipads and sketch pads. The table below outlines the production possibilities for each producer. Producers/Goods Ipads Computers Holland 6 2 Aruba 10 5 Who has the absolute advantage in producing ipads?arrow_forwardProduction 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.arrow_forward
- Pairs of Red Socks per Worker per Hour Pairs of White Socks per Worker per Hour Boston 5 2 Chicago 4 3 Without trade, the price of a pair of white socks (in terms of red socks) in Boston is of red socks, and in Chicago it is of red socks. has an absolute advantage in the production of red socks, and has an absolute advantage in the production of white socks. has a comparative advantage in the production of red socks, and has a comparative advantage in the production of white socks. If the cities trade with each other, Boston will export socks, and Chicago will export socks. The price of white socks can be expressed in terms of red socks. The highest price at which white socks can be traded that would make both cities better off is of red socks per pair of white socks, and the lowest price that makes both cities better off is of red socks per pair of white socks.arrow_forwardMorocco and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In Morocco 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. a. Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes. b. Identify which country has comparative advantage in which product. c. Initially each country used ½ of the workers in producing green beans and tomatoes. If each country specializes based on comparative advantage find an exchange mechanism so that both gain from trade.arrow_forwardZeetopia and Freshland are two small tropical islands that use the same amounts of resources to produce mangoes and coconuts as shown in the table below. Coconuts (in tons) Mangoes (in tons) Zeetopia 50 60 Freshland 50 30 (a) Which island has an absolute advantage in producing coconuts? Explain. (b) Which island has a comparative advantage in producing coconuts? Explain. (c) Assume Zeetopia and Freshland decide to specialize according to their comparative advantages and 1 ton of coconuts is exchanged for 1 ton of mangoes. Are specialization and trade under these terms beneficial to both Zeetopia and Freshland? Explain. (d) Assume the two islands experience constant opportunity costs in the production of the two products. Draw a correctly labeled graph illustrating Zeetopia’s and Freshland’s production possibilities, showing coconuts on the horizontal axis and mangoes on the vertical axis. Plot the numerical values from the table above on your graph. (e) On your graph…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning