BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

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.

a. 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?

b. 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?

c. 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?

d. In this example, is absolute advantage the same as comparative advantage, or not?

e. In what product should Germany specialize? In what product should Poland specialize?

a.

To determine

The absolute advantage in television and video camera among the two countries needs to be determined.

Explanation

The given information is below:

    CountryTelevisionVideo camera
    Germany  3 workers  4 workers
    Poland  6 workers  12 workers

Now, for knowing the advantage, the following table is made:

    CountryTelevisionVideo camera
    Germany  3 workers× 2x

b.

To determine

The opportunity cost of producing 1 additional television in Germany and in Poland and the country having comparative advantage in the production of televisions needs to be determined.

c.

To determine

The opportunity cost of producing 1 additional video camera in Germany and in Poland and the country having comparative advantage in the production of video camera needs to be determined.

d.

To determine

To analyze: absolute and comparative advantage in each of the country

e.

To determine

The products in which both countries should have specialization needs to be determined.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why do marketers use sales promotion?

Foundations of Business (MindTap Course List)

Construct a DuPont analysis for Hewlett Packard and its peers. What are Hewlett Packards strengths and weakness...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)