Principles of Macroeconomics 2e
2nd Edition
ISBN: 9781947172388
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 20, Problem 29P
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?
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Chapter 20 Solutions
Principles of Macroeconomics 2e
Ch. 20 - True or False: The source of comparative advantage...Ch. 20 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 20 - In France it takes one worker to produce one...Ch. 20 - In Germany it takes three workers to make one...Ch. 20 - How can there be any economic gains for a country...Ch. 20 - Table 33.15 shows how the average costs of...Ch. 20 - If the removal of trade banters is so beneficial...Ch. 20 - What is absolute advantage? What is comparative...Ch. 20 - Under what conditions does comparative advantage...Ch. 20 - What factors does Paul Krugman identity that...
Ch. 20 - Is it possible to have a comparative advantage in...Ch. 20 - How does comparative advantage lead to gains from...Ch. 20 - What is intra-industry trade?Ch. 20 - What are the two main sources of economic gains...Ch. 20 - What is splitting up the value chain?Ch. 20 - Are the gains from international trade more likely...Ch. 20 - Are differences in geography behind the...Ch. 20 - Why does the United States not have an absolute...Ch. 20 - Look at Exercise 33.2. Compute the opportunity...Ch. 20 - You just overheard your friend say the following:...Ch. 20 - Look at Table 33.9. Is there a range of trades for...Ch. 20 - You just got a job in Washington, D.C. You move...Ch. 20 - Does intra-industry trade contradict the theory of...Ch. 20 - Do consumers benefit from intra-industry trade?Ch. 20 - Why might intra-industry trade seem surprising...Ch. 20 - In World Trade Organization meetings, what do you...Ch. 20 - Why might a low-income country put up barriers to...Ch. 20 - Can a nations comparative advantage change over...Ch. 20 - France and Tunisia both have Mediterranean...Ch. 20 - In Japan, one worker can make 5 tons of rubber or...Ch. 20 - Review the numbers for Canada and Venezuela from...Ch. 20 - In Exercise 33.31, is there an ask where...Ch. 20 - From earlier chapters you will recall that...Ch. 20 - Consider two countries: South Korea and Taiwan....Ch. 20 - If trade increases world GDP by 1 per year, what...
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