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MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
6th Edition
ISBN: 9780134125886
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 9, Problem 9.2.7PA
To determine
Calculation of
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Estonia
Finland
One Cell
Phone
40 hours
15 hours
Lumber (per
board foot)
8 hours
4 hours
Table 2-5 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland.
Refer to Table 2-5. Does either Estonia or Finland have a comparative advantage and if so, in what product?
O Both countries have the comparative advantage in both lumber and cellphones.
O Estonia has an comparative advantage in lumber while Finland has the comparative advantage in cellphones.
O Finland has an comparative advantage in lumber while Estonia has the comparative advantage in cellphones.
O cannot be determined.
Suppose there are two countries for analyses, the United States and Indonesia. Assume that 2000 man hours are available in the United States and 36000 in Indonesia. The following table provides information on how many man-hours are needed to produce one unit of the same goods.
Indonesia
United States
Cloth
50
3
Machines
100
5
2.1) Which country has the comparative advantage of cloth and in machines? Show your calculations.
Labor productivity coefficients for the US and Brazil are given by the following table:
Country
Wheat per week
Clothing per week
Labor(number of workers)
United States
2
8
100
Brazil
1
2
120
Solve for:
Who has the absolute advantage in wheat?
What is the opportunity cost of 1 unit of wheat in the US? in Brazil?
What is the opportunity cost of 1 unit of clothing in the US? in Brazil?
Who has the comparative advantage in Wheat? In Clothing?
Draw the production possibility frontier for the US. (Put Wheat on the Y-axis and Clothing on the X-axis)
For Brazil (Put Wheat on the Y-axis and Clothing on the X-axis)
Suppose each country decides to split its labor force equally on the production of each good. Locate the point on the PPF curve for each country that represents this allocation of labor.
What’s their production and consumption combination # at this point?
Chapter 9 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Microeconomics
Ch. 9 - Prob. 9.1.1RQCh. 9 - Prob. 9.1.2RQCh. 9 - Prob. 9.1.3RQCh. 9 - Prob. 9.1.4PACh. 9 - Prob. 9.1.5PACh. 9 - Prob. 9.1.6PACh. 9 - Prob. 9.1.7PACh. 9 - Prob. 9.2.1RQCh. 9 - Prob. 9.2.2RQCh. 9 - Prob. 9.2.3PA
Ch. 9 - Prob. 9.2.4PACh. 9 - Prob. 9.2.5PACh. 9 - Prob. 9.2.6PACh. 9 - Prob. 9.2.7PACh. 9 - Prob. 9.2.8PACh. 9 - Prob. 9.2.9PACh. 9 - Prob. 9.3.1RQCh. 9 - Prob. 9.3.2RQCh. 9 - Prob. 9.3.3RQCh. 9 - Prob. 9.3.4RQCh. 9 - Prob. 9.3.5PACh. 9 - Prob. 9.3.6PACh. 9 - Prob. 9.3.7PACh. 9 - Prob. 9.3.8PACh. 9 - Prob. 9.3.9PACh. 9 - Prob. 9.3.10PACh. 9 - Prob. 9.3.11PACh. 9 - Prob. 9.3.12PACh. 9 - Prob. 9.3.13PACh. 9 - Prob. 9.4.1RQCh. 9 - Prob. 9.4.2RQCh. 9 - Prob. 9.4.3PACh. 9 - Prob. 9.4.4PACh. 9 - Prob. 9.4.5PACh. 9 - Prob. 9.4.6PACh. 9 - Prob. 9.4.7PACh. 9 - Prob. 9.4.8PACh. 9 - Prob. 9.4.9PACh. 9 - Prob. 9.4.10PACh. 9 - Prob. 9.4.11PACh. 9 - Prob. 9.4.12PACh. 9 - Prob. 9.4.13PACh. 9 - Prob. 9.4.14PACh. 9 - Prob. 9.4.15PACh. 9 - Prob. 9.5.1RQCh. 9 - Prob. 9.5.2RQCh. 9 - Prob. 9.5.3RQCh. 9 - Prob. 9.5.4RQCh. 9 - Prob. 9.5.5PACh. 9 - Prob. 9.5.6PACh. 9 - Prob. 9.5.7PACh. 9 - Prob. 9.5.8PACh. 9 - Prob. 9.5.9PACh. 9 - Prob. 9.5.10PA
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- According to the theory of comparative advantage, a country goods in which it has a comparative advantage. exports imports Oexports and imports does not trade Question 10 10 the 10arrow_forwardComputers Wheat country A 10 4 country B 6 3 Table shows the number of hours of labor required to produce 1 unit of output of computers and wheat in country A and B. Country ……… has an absolute advantage in computers. Country………. has an absolute advantage in wheat. Country……… has a comparative advantage in computers. Country……... has a comparative advantage in wheat. Price ratio( computers/wheat) should be between …………. and …………. for free trade.arrow_forwardCars Trucks Mexico 30 20 Canada 24 16 Which country has the Absolute Advantage in Cars and Trucks Which country has the Comparative Advantage in Cars and Trucksarrow_forward
- Two countries (A and B) produce tea and oranges using labor. The number of hours of labor required to produce these goods are given as follows: Country Тea Oranges A 6 20 В 8 30 If both countries have 1500 hours of labor available, explain how they can gain from trade.arrow_forwardLENTILS (Millions of pounds) 80 70 8 60 50 40 30 20 10 + 0 0 PPF 10 Shenandoah 20 30 40 50 60 PEAS (Millions of pounds) 70 80 (?) LENTILS (Millions of pounds) 80 70 60 50 40 30 PPF 20 10 0 0 T 10 Denali 40 20 30 50 60 PEAS (Millions of pounds) 70 80 (?) Shenandoah has a comparative advantage in the production of , while Denali has a comparative advantage in the production of . Suppose that Shenandoah and Denali specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of peas. million pounds of lentils and million pounds of Suppose that Shenandoah and Denali agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 20 million pounds of peas for 20 million pounds of lentils. This ratio of goods is known as the price of trade between Shenandoah and Denali. The following graph shows the same PPF for Shenandoah…arrow_forwardWhich country has comparative advantage in the production of washing machines and automobiles?arrow_forward
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