Exploring Macroeconomics
7th Edition
ISBN: 9781285859446
Author: Sexton, Robert L.
Publisher: Cengage Learning
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Chapter 20, Problem 5P
To determine
To analyze:
The given statement.
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Evaluate the following statement: "Canada has an absolute advantage in growing wheat. Therefore, it must have a comparative advantage in growing wheat.
Country A can produce 20 units of wheat or 10 units of corn, while Country B can produce 15 units of wheat or 5 units of corn.
Which country has the comparative advantage in producing wheat?
American worker takes 20 hours to produce one computer and 300 hours to produce an RV. A Japanese worker takes 30 hours to produce one computer and 450 Hours to produce an RV. Which country has a comparative advantage in what product? Why?
Chapter 20 Solutions
Exploring Macroeconomics
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- Country X Country Y Phones Television sets a) Fill in the table to show that country x has an absolute advantage in the production of both goods and a comparative advantage in the production of phones.arrow_forwardIf a country produces only two goods, then it is not possible to have a comparative advantage in the production of both those goods. True Falsearrow_forwardIf each country specializes in the good in which it has a comparative advantage,....will gain from that trade becausearrow_forward
- Explain briefly why a country can have an absolute advantage in the production of two goods, and yet a comparative advantage in the production of only one good just in a few sentencesarrow_forwardPlease see below. Need help with this.arrow_forwardSuppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce million pairs per week, and the country that produces corn will produce million bushels per week.arrow_forward
- Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces rye will produce million bushels per month, and the country that produces jeans will produce million pairs per month.arrow_forwardThe U.S. can produce 100 pounds of beef or 10 cars; in contrast Germany can produce 40 pounds of beef or 30 cars. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing cars? What is the opportunity cost of producing one pound of beef in the U.S. What is the opportunity cost of producing one pound of beef in Germany?arrow_forwardJapan can use all of its resources to produce 100 videos or 400 shoes. China can use all of its resources to produce 25 videos or 200 shoes. Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?arrow_forward
- Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces pistachios will produce. million pounds per day and the country that produces chinos will produce million pairs per day.arrow_forwardTwo countries, Nicaragua and Argentina can both produce bananas and wheat. Their production possibility frontiers are shown below. Based on this we can say that Nicaragua has a comparative advantage in producing__________. Both countries can gain from trade if Nicaragua produces___________ and Argentina produces __________ and trade. Bananas; bananas; wheat. Bananas; wheat; bananas. Wheat; wheat; bananas Wheat, bananas; bananasarrow_forwardConsider the following table which shows production information for Austria and Belgium. Assume Austria and Belgium have the same amount of resources. Austria Belgium 40 Steel 50 Brooms 40 30 Which country has the comparative advantage in production of Steel?arrow_forward
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