A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B can produce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would each country produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In the production of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?
A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B can produce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would each country produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In the production of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
Section: Chapter Questions
Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...
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A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B can
produce either 7 computers or 42 tons of rice.
a. Graph the
country produce if the workers spent half of their time producing each good?
b. Which country has
production of rise Country A absolute advantage
c. If there was trade, which country would specialize in the production of rice?
d. At what price of computers would the countries agree to trade?
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