The PPFs below shows how many airplanes and pizzas Country A and Country B can produce with a certain number of workers. The x-axis represents the quantity of pizzas, the y-axis represents the quantity of airplanes. The red line indicates the PPF for country A, the green line indicates the PPF for country B. Which country has comparative advantage in pizza?

The PPFs below shows how many airplanes and pizzas Country A and Country B can produce with a certain number of workers. The x-axis represents the quantity of pizzas, the y-axis represents the quantity of airplanes. The red line indicates the PPF for country A, the green line indicates the PPF for country B. Which country has comparative advantage in pizza?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 2P

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The PPFs below shows how many airplanes and pizzas Country A and Country B can produce with a certain number of workers. The x-axis represents the quantity of pizzas, the y-axis represents the quantity of airplanes. The red line indicates the PPF for country A, the green line indicates the PPF for country B. Which country has comparative advantage in pizza? Group of answer choices Both Country A and Country B Country A Neither Country A nor Country B Country B
In the no specialization-no trade case, country X produces and consumes 60 units of good A and 10 units of good B. Country Y produces and consumes 20 units of good A and 20 units of good B. If the two countries specialize and trade, how many more units of good B will country X consume?
Assume that Germany has 1200 units of labor available and it can produce two goods: apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. France has a labor force of 800. France’s unit labor requirement in apple production is 5, while in banana production it is 1. A) Show on the PPF how both Germany and France gain from trade. B) How many units of apples and bananas will be produced in the world after trade?
Japan can use all of its resources to produce 100 videos or 400 shoes. China can use all of its resources to produce 25 videos or 200 shoes. Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?
On the same graph, draw two PPFs: one for Arizona and one for North Dakota. Assume Arizona can produce 80 bales of hay or 20 pounds of sunflowers. North Dakota can produce 30 bales of hay or 120 pounds of sunflowers. For both states, points in between these limits are possible. Show how the total production of hay and sunflowers is greater with specialization than with self-sufficiency. Assume that the states trade 20 bales of hay for 30 pounds of sunflowers. Demonstrate the gains from trade with points on your graph. 1. Explain the opportunity costs of producing 1 bale of hay and 1 pound of sunflowers for each state. 2. Draw your own PPF graph on a piece of paper. 3. Clearly label all axes and lines. Include all relevant information.
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?
Suppose Morgan can produce 50 pizzas or 200 beers in a day and Jack can produce 10 pizzas or 100 beers in a day. What is a price of a pizza that both Morgan and Jack can gain from trade by specializing in the good they produce at a comparative advantage in? They are trading only with one another. Group of answer choices a. 1 pizza sells for 3 beers b. 1 pizza sells for 20 beers c. 1 pizza sells for 6 beers d. 1 pizza sells for 2 beers
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 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?
ABSOLUTE ADVANTAGE & COMPARATIVE ADVANTAGE Q.6. An average worker in brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, whilst 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 II. Who has the comparative advantage in coffee? Explain III. If the two countries specialize and trade with each other, who will import coffee? Explain