Microeconomics, Student Value Edition (6th Edition)
6th Edition
ISBN: 9780134125756
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.2.4PA
Subpart (a):
To determine
US and Canada
Subpart (b):
To determine
Subpart (c):
To determine
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour.
Which country has the absolute advantage in the production of each good? Which country has the comparative advantage?
If England and Scotland decide to trade, which commodity will Scotland export to England? Explain.
If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.
Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day.
Part 2
France
Germany
Wine (Bottles)
Cheese (Pounds)
Wine (Bottles)
Cheese (Pounds)
0
8
0
25
1
6
1
20
2
4
2
15
3
2
3
10
4
0
4
5
5
0
Part 3
Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese?
Part 4
A.
Neither has a comparative advantage producing wine or cheese.
B.
France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese.
C.
France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine.
D.
France has a comparative advantage producing wine and cheese.
E.
Germany has a comparative advantage producing wine and cheese.
Part 5
Suppose that France is…
An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes.
Who has the absolute advantage in coffee? Explain.
Who has the comparative advantage in coffee? Explain.
If the two countries specialize and trade with each other, who will import coffee? Explain.
Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.
Chapter 2 Solutions
Microeconomics, Student Value Edition (6th Edition)
Ch. 2 - Prob. 1TCCh. 2 - Prob. 2TCCh. 2 - Prob. 2.1.1RQCh. 2 - Prob. 2.1.2RQCh. 2 - Prob. 2.1.3RQCh. 2 - Prob. 2.1.4PACh. 2 - Prob. 2.1.5PACh. 2 - Prob. 2.1.6PACh. 2 - Prob. 2.1.7PACh. 2 - Prob. 2.1.8PA
Ch. 2 - Prob. 2.1.9PACh. 2 - Prob. 2.1.10PACh. 2 - Prob. 2.1.11PACh. 2 - Prob. 2.1.12PACh. 2 - Prob. 2.1.13PACh. 2 - Prob. 2.1.14PACh. 2 - Prob. 2.2.1RQCh. 2 - Prob. 2.2.2RQCh. 2 - Prob. 2.2.3PACh. 2 - Prob. 2.2.4PACh. 2 - Prob. 2.2.5PACh. 2 - Prob. 2.2.6PACh. 2 - Prob. 2.2.7PACh. 2 - Prob. 2.2.8PACh. 2 - Prob. 2.2.9PACh. 2 - Prob. 2.2.10PACh. 2 - Prob. 2.2.11PACh. 2 - Prob. 2.2.12PACh. 2 - Prob. 2.2.13PACh. 2 - Prob. 2.2.14PACh. 2 - Prob. 2.2.15PACh. 2 - Prob. 2.3.1RQCh. 2 - Prob. 2.3.2RQCh. 2 - Prob. 2.3.3RQCh. 2 - Prob. 2.3.4RQCh. 2 - Prob. 2.3.5RQCh. 2 - Prob. 2.3.6RQCh. 2 - Prob. 2.3.7PACh. 2 - Prob. 2.3.8PACh. 2 - Prob. 2.3.9PACh. 2 - Prob. 2.3.10PACh. 2 - Prob. 2.3.11PACh. 2 - Prob. 2.3.12PACh. 2 - Prob. 2.3.13PACh. 2 - Prob. 2.3.14PACh. 2 - Prob. 2.3.15PACh. 2 - Prob. 2.3.16PA
Knowledge Booster
Similar questions
- 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_forwardComparative advantage is an important concept to explain how economies work. Because of comparative advantage, it is possible for people to use their skills and time productively even if they are not the best at something. To help illustrate the usefulness of this concept: Think of an example (work, family chores, school projects, etc.) where you might not have an absolute advantage at something, but you do have a comparative advantage. By this, I mean that you might not be the fastest or the best at a particular job. Other employees, family members, etc. may do the job quicker or better than you could. But their opportunity cost was high, meaning they had something more necessary for them to do, so it made sense for you to do this job. Explain how this was an example of you having a comparative advantage but not an absolute advantage. Did you (and the others in your example) specialize according to comparative advantage? What job(s) did you do? What did other people do? Did this…arrow_forwardProduction Advantage and Opportunity Costs Assume there are two countries, the United States and France, and two goods, automobiles and computers. The table presented below shows the number of automobiles and computers that the United States and France can produce with the same amount of resources. United States France Automobiles 120 100 Computers 60 55 Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer. Which country has a comparative advantage in the production of automobiles? Motivate your answer. Assume these countries trade with one another under the conditions of free trade. Which country will specialise in the production of automobiles? Motivate your answer. If free trade exists between the United States and France, what are the highest and lowest levels for the price of an…arrow_forward
- Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) Tacos (in tons) Hamburgers (in tons) Tacos (in tons) 90 75 50 60 10 50 100 30 20 25 150 30 Which country has an absolute advantage in producing tacos? The United States Which country has a comparative advantage in producing tacos? Mexico Suppose the United States is currently producing 100 tons of hamburgers and 30 tons of tacos and Mexico is currently producing 20 tons of hamburgers and 25 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer)arrow_forwardSuppose that Bob and Jimmy both have 10 hours of time that they can use to do one of two things: make pasta or make hamburgers. Bob can make 15 hamburgers in one hour and 3 plates of pasta in one hour. Jimmy can make 8 hamburgers in one hour and 2 plates of pasta in one hour. Who has comparative in the production of hamburgers? Who has comparative advantage in the production of pasta? If Bob and Jimmy trade, who should specialize in producing hamburgers and who should specialize in producing pancakes? Give an example of terms of trade at which mutually beneficial trade would be possible between Bob and Jimmy.arrow_forwardDebra can make either 12 cakes or 16 cookies in 4 hours.Sam can make either 6 cakes or 12 cookies in 4 hours. a) who has an absolute advantage at producing cakes and who has an absolute advantage at producing cookies? Briefly explain your answer. b) if Debra and Sam concentrate on producing only the product in which they have a comparative advantage, how many cakes and how many cookies will they produce? c) state debra's and Sam's opportunity costs of producing one cake and one cookie. Draw and place your answer in a table which looks something like this: Cake. Cookie Debra samarrow_forward
- Assume a world of two nations USA and The two nations produce machinery and agriculture. The USA can produce 160 units of machinery or 200 units of agriculture while Australia can produce 140 units of machinery or 50 units of agriculture, in the same time period. Define “absolute advantage” Which country, Australia or USA, has an absolute advantage in the production of agriculture and machinery? Explain the basis for your answer. Which country – Australia or USA - has a comparative advantage in production of machinery and agriculture? Define comparative advantage and explain how it applies in this example.arrow_forwardState what the theory of comparative advantage forecasts: When there are two countries A and B, and two goods are produced by them: good X and Y. a) Trade between A and B will only take place if both countries are at a comparatively similar stage in the development of their economies. b) Trade can take place even if country A has an absolute advantage in both providing that B chooses to specialize in the good in which it has the least comparative disadvantage, and A specializes in the one in which it has the greater comparative advantage. c) Trade can only take place if country A has an absolute advantage in producing one of the goods, and country B has an absolute advantage in producing the other. d) None of the above.arrow_forwardSuppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Hamburgers (in tons) Mexico Tacos (in tons) Hamburgers (in tons) Tacos (in tons) 27 15 10 20 18 9 10 30 Which country has an absolute advantage in producing tacos? The United States. Which country has a comparative advantage in producing tacos? Mexico Suppose the United States is currently producing 20 tons of hamburgers and 9 tons of tacos and Mexico is currently producing 4 tons of hamburgers and 5 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer)arrow_forward
- Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below United States Mexico Tacos (in tons) 180 120 60 Hamburgers (in tons) Tacos (in tons) 150 100 50 Hamburgers (in tons) 100 200 10 20 30 300 Which country has an abrolute advantage in producing tacos? The United States Which country has a comparative advantage in producing tacos? Mexico Suppose the United States is currently producing 200 tons of hamburgers and 60 tons of tacos and Mexico is currently producing 20 tons of hamburgers and 50 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numenc response using an integear) I don't understand the bottom part I got it wrong twice. After I click next there is also…arrow_forwardSuppose that Spain and Switzerland both produce oil and cheese. Spain's opportunity cost of producing a pound of cheese is 4 barrels of oil while Switzerland's opportunity cost of producing a pound of cheese is 10 barrels of oil. By comparing the opportunity cost of producing cheese in the two countries, you can tell that has a comparative advantage in the production of cheese and has a comparative advantage in the production of oil. Suppose that Spain and Switzerland consider trading cheese and oil with each other. Spain can gain from specialization and trade as long as it receives more than of oil for each pound of cheese it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than of cheese for each barrel of oil it exports to Spain. Based on your answer to the last question, which of the following prices of trade (that is, price of cheese in terms of oil) would allow both Switzerland and Spain to gain from…arrow_forwardDavid Ricardo, the British political economist, used the example of two commodities—wine and cloth—produced by England and Portugal to explain trade. The following table shows the number of labor hours it would take England and Portugal to produce one unit each of wine and cloth: (see table attatched) Portugal can produce both wine and cloth using fewer labor hours than England uses. A group of mercantilists (who believe that nations build their wealth by exporting more than they import) suggest that Portugal has nothing to gain from trading with England. Would you agree? Explain your answer.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co