Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 33, Problem 30P
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.
- Who has the
absolute advantage in the production of rubber or radios? How can you tell? - Calculate the
opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has acomparative advantage in the production of radios? - Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber?
- In this example, does each country have an absolute advantage and a comparative advantage in the same good?
- In what product should Japan specialize? In what product should Malaysia specialize?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.
Who has the absolute advantage in the production of rubber or radios? How can you tell?
Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine.) Which country has a comparative advantage in the production of radios?
Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber?
In this example, does each country have an absolute advantage and a comparative advantage in the same good? e. In what product should Japan specialize? In what product should Malaysia specialize?
The 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?
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.
Calculate the opportunity cost of producing 80 additional radios in Malaysia.
Which country has the comparative advantage in producing radios?
Calculate the opportunity cost of producing 10 additional tons of rubber in Japan.
Calculate the opportunity cost of producing 10 additional tons of rubber in Malaysia.
Which country has the comparative advantage in producing rubber?
In what product should Japan specialize? In what product should Malaysia specialize?
Chapter 33 Solutions
Principles of Economics 2e
Ch. 33 - True or False: The source of comparative advantage...Ch. 33 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 33 - In France it takes one worker to produce one...Ch. 33 - In Germany it takes three workers to make one...Ch. 33 - How can there be any economic gains for a country...Ch. 33 - Table 33.15 shows how the average costs of...Ch. 33 - If the removal of trade banters is so beneficial...Ch. 33 - What is absolute advantage? What is comparative...Ch. 33 - Under what conditions does comparative advantage...Ch. 33 - What factors does Paul Krugman identity that...
Ch. 33 - Is it possible to have a comparative advantage in...Ch. 33 - How does comparative advantage lead to gains from...Ch. 33 - What is intra-industry trade?Ch. 33 - What are the two main sources of economic gains...Ch. 33 - What is splitting up the value chain?Ch. 33 - Are the gains from international trade more likely...Ch. 33 - Are differences in geography behind the...Ch. 33 - Why does the United States not have an absolute...Ch. 33 - Look at Exercise 33.2. Compute the opportunity...Ch. 33 - You just overheard your friend say the following:...Ch. 33 - Look at Table 33.9. Is there a range of trades for...Ch. 33 - You just got a job in Washington, D.C. You move...Ch. 33 - Does intra-industry trade contradict the theory of...Ch. 33 - Do consumers benefit from intra-industry trade?Ch. 33 - Why might intra-industry trade seem surprising...Ch. 33 - In World Trade Organization meetings, what do you...Ch. 33 - Why might a low-income country put up barriers to...Ch. 33 - Can a nations comparative advantage change over...Ch. 33 - France and Tunisia both have Mediterranean...Ch. 33 - In Japan, one worker can make 5 tons of rubber or...Ch. 33 - Review the numbers for Canada and Venezuela from...Ch. 33 - In Exercise 33.31, is there an ask where...Ch. 33 - From earlier chapters you will recall that...Ch. 33 - Consider two countries: South Korea and Taiwan....Ch. 33 - If trade increases world GDP by 1 per year, what...
Additional Business Textbook Solutions
Find more solutions based on key concepts
How does the size of the initial investment affect the internal rate of return on the net present value models?
Principles of Accounting Volume 2
Determine the annual budget for office utilities using the data from the past 12 months shown in Figure 9-7. Ut...
Construction Accounting And Financial Management (4th Edition)
Define cost pool, cost tracing, cost allocation, and cost-allocation base.
Cost Accounting (15th Edition)
Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to us...
Managerial Accounting (4th Edition)
E2-13 Identifying increases and decreases in accounts and normal balances
Learning Objective 2
Insert the mis...
Horngren's Accounting (11th Edition)
How are planning, implementation, and controlling related?
Principles of Management
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes. Who has the absolute advantage in coffee? Explain. Who has the comparative advantage in coffee? Explain. If the two countries specialize and trade with each other, who will import coffee? Explain. Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.arrow_forwardSuppose that an hour of work in Germany can produce 5 pastries or 4 sausages. In Denmark, an hour of work produces 4 pastries or 3 sausages. Which country has the absolute advantage in pastries? In sausages? Calculate the opportunity cost of each good in each country. Which country has the comparative advantage in each good? Why? What would be a mutually beneficial terms of trade?arrow_forwardIn Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Which country has the absolute advantage in the production of rubber? Which country has the absolute advantage in the production of radios? Explain your answers to (a) and (b). Calculate the opportunity cost of producing 80 additional radios in Japan. Calculate the opportunity cost of producing 80 additional radios in Malaysia. Which country has the comparative advantage in producing radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan. Calculate the opportunity cost of producing 10 additional tons of rubber in Malaysia. Which country has the comparative advantage in producing rubber? In what product should Japan specialize? In what product should Malaysia specialize? If Malaysia wishes to trade 10 tons of rubber with Japan in exchange for radios, what is the lowest number of radios it should ask for in order to benefit…arrow_forward
- Y 100 Country A X Y 40 Country B 40 X 20 a) How much of Good Y will Country B produce if they specialize in their comparative advantage? 40 b) By themselves, if Country B produces 18 units of Y, what is the maximum amount they could produce of Good X? 18 c) If the terms of trade proposed are 5 X for 10Y, how much will Country B be able to consume of Good Y after trade if they specialize in their comparative advantage before trading? 40arrow_forwardCountry A can produce either 200 personal computers or 800 tons of potatoes with the same amount of resources. Country B can produce either 500 personal computers or 1,000 tons of potatoes with the same amount of resources. 1) which country has the absolute advantage in PC? which country has the absolute advantage in potato? 2) which country has the comparative advantage in PC? which country has the comparative advantage in potato? 3) Any trading ratio between which two ratios (of PC to potato) would benefit both countries? 4) Assuming the trading ratio is "PC: tons of potatoes = 1:3". If Country A only produces PC and Country B only produces potato, when they trade, I.) how many extra tons of potatoes can Country A obtain, comparing to the scenario in which Country A produces potato by itself? II.)how many extra PCs can Country B obtain, comparing to the scenario in which Country B produces PC by itself?arrow_forwardSuppose that a tailor in Cottonland can sew either 40 cotton shirts or 10 silk shirts per week, and a tailor in Silkland can sew either 18 cotton shirts or 6 silk shirts per week. There are 20 tailors in Cottonland and 20 tailors is Silkland. Answer the following questions: 2.1. What country has the absolute advantage in sewing cotton shirts? What country has the absolute advantage in sewing silk shirts? 2.2. What country has the comparative advantage in sewing cotton shirts? What country has the comparative advantage in sewing silk shirts? Numerically 2.3. If the two countries specialize and produce according to the comparative advantage criterion, how much in terms of cotton and silk shirts each country will produce per week? Fill in the table below with your calculations. Cotton shirts/per week Silk shirts/per week Cottonland Silklandarrow_forward
- England and Scotland both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour. Which country has the absolute advantage in the production of each good? Which country has the comparative advantage? If England and Scotland decide to trade, which commodity will Scotland export to England? Explain. If a Scottish worker could produce only 1 sweater per hour, would Scotland still gain from trade? Would England still gain from trade? Explain.arrow_forwardThe United States produces 8 units of lumber and 8 automobiles. Canada produces 4 units of lumber and 2 automobiles. Which country has an absolute advantage in producing lumber? Which country has an absolute advantage in producing automobiles? Which country has a comparative advantage, if any, in producing lumber?arrow_forwardIn Country T, it takes 10 resources to produce 1 ton of cocoa and 13.5 resources to produce 1 ton of rice. In Country Y, it takes 40 resources to produce 1 ton of cocoa and 20 resources to produce 1 ton of rice. Country T has a comparative advantage over Country Y in cocoa. This follows the theory of comparative advantage, and we can say that engaging in free trade benefits all countries that participate in it; however, this conclusion stems from which of these inaccurate assumptions? Multiple Choice We have assumed constant returns to scale. We have assumed the prices of resources and exchange rates in the two countries are dynamic. We have assumed there are barriers to the movement of resources from the production of one good to another within the same country. We have assumed that agrarian nations do not specialize in producing particular products. We have assumed diminishing returns to specialization.arrow_forward
- home cheese alc=1hr/kg wine alw=2hrs/gallon foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign* ) country has an absolute advantage? Show in which product does the Home (Foreign* ) country has comparative advantage? Calculate the relative supply (RS) With trade, what is the equilibrium range that the relative price of cheese to wine will settle? Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?arrow_forward#4. Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine.) Which country has a comparative advantage in the production of radios? #5. Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? #6. In this example, does each country have an absolute advantage and a comparative advantage in the same good?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc