Give answer y ToolsTipsTipsConsider two neighboring island countries called Bellissima and Dolorium. They each have 4 million labor hours available per week that they can useto produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor.CountryBellissimaDoloriumRye(Bushels per hour of labor)6is4Jeans(Pairs per hour of labor)1216Initially, suppose Bellissima uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Dolorium uses3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Bellissima produces 6 million bushels ofrye and 36 million pairs of jeans, and Dolorium produces 12 million bushels of rye and 16 million pairs of jeans. Assume there are no other countrieswilling to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces.of jeans, and Dolorium's opportunity cost of producing 1 bushel of ryehas a comparativehas a comparative advantage in the production of rye, andBellissima's opportunity cost of producing 1 bushel of rye isof jeans. Therefore,advantage in the production of jeans.Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. Inmillion bushels per week, and the country that produces jeans will producethis case, the country that produces rye will producemillion pairs per week.In the following table, enter each country's production decision on the third row of the table (marked "Production").Suppose the country that produces rye trades 14 million bushels of rye to the other country in exchange for 42 million pairs of jeans.In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," andenter each country's final consumption of each good on the line marked "Consumption."million bushels per week, and the totalWhen the two countries did not specialize, the total production of rye was 18 million bushels per week, and the total production of jeans was 52million pairs per week. Because of specialization, the total production of rye has increased byproduction of jeans has increased bymillion pairs per week.Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.

Comparative advantage refers to the ability to produce goods and services at a lower opportunity…

Consider two neighboring island countries called Bellissima and Dolorium. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Bellissima Dolorium Rye (Bushels per hour of labor) 6 4 is Initially, suppose Bellissima uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Bellissima produces 6 million bushels of rye and 36 million pairs of jeans, and Dolorium produces 12 million bushels of rye and 16 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. Jeans (Pairs per hour of labor) 12 16 of jeans. Therefore, advantage in the production of jeans. Bellissima's opportunity cost of producing 1 bushel of rye is of jeans, and Dolorium's opportunity cost of producing 1 bushel of rye has a comparative has a comparative advantage in the production of rye, and Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In million bushels per week, and the country that produces jeans will produce this case, the country that produces rye will produce million pairs per week. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces rye trades 14 million bushels of rye to the other country in exchange for 42 million pairs of jeans. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." million bushels per week, and the total When the two countries did not specialize, the total production of rye was 18 million bushels per week, and the total production of jeans was 52 million pairs per week. Because of specialization, the total production of rye has increased by production of jeans has increased by million pairs per week. Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.

Consider two neighboring island countries called Bellissima and Dolorium. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Bellissima Dolorium Rye (Bushels per hour of labor) 6 4 is Initially, suppose Bellissima uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Bellissima produces 6 million bushels of rye and 36 million pairs of jeans, and Dolorium produces 12 million bushels of rye and 16 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. Jeans (Pairs per hour of labor) 12 16 of jeans. Therefore, advantage in the production of jeans. Bellissima's opportunity cost of producing 1 bushel of rye is of jeans, and Dolorium's opportunity cost of producing 1 bushel of rye has a comparative has a comparative advantage in the production of rye, and Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In million bushels per week, and the country that produces jeans will produce this case, the country that produces rye will produce million pairs per week. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces rye trades 14 million bushels of rye to the other country in exchange for 42 million pairs of jeans. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." million bushels per week, and the total When the two countries did not specialize, the total production of rye was 18 million bushels per week, and the total production of jeans was 52 million pairs per week. Because of specialization, the total production of rye has increased by production of jeans has increased by million pairs per week. Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter19: Labor And Entrepreneurship: The Human Inputs

Section: Chapter Questions

Problem 14DQ

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