Table 3-11 Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. Output Produced in One Day Coolers Radios 12 6 24 3 Jamaica Norway Refer to Table 3-11. Jamaica's opportunity cost of one cooler is a. 0.5 radios, and Norway's opportunity cost of one cooler is 0.125 radios. b. 2 radios, and Norway's opportunity cost of one cooler is 0.125 radios. c. 2 radios, and Norway's opportunity cost of one cooler is 8 radios. Od. 0.5 radios, and Norway's opportunity cost of one cooler is 8 radios.

Table 3-11 Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. Output Produced in One Day Coolers Radios 12 6 24 3 Jamaica Norway Refer to Table 3-11. Jamaica's opportunity cost of one cooler is a. 0.5 radios, and Norway's opportunity cost of one cooler is 0.125 radios. b. 2 radios, and Norway's opportunity cost of one cooler is 0.125 radios. c. 2 radios, and Norway's opportunity cost of one cooler is 8 radios. Od. 0.5 radios, and Norway's opportunity cost of one cooler is 8 radios.

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 2SCQ: Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40...

See similar textbooks

Similar questions

In Germany it takes three workers to make one television and four workers to make one video camera. In Poland It takes six workers to make one television and 12 workers to make one video camera. Who has the absolute advantage in the production of televisions? Who has the absolute advantage in the production of video cameras? How can you tell? Calculate the opportunity cost of producing one additional television set in Germany and In Poland. (Your calculation may involve fractions, which Is tine.) Which country has a comparative advantage in the production of televisions? Calculate the opportunity cost of producing one video camera in Germany and in Poland. Which country has a comparative advantage in the production of video cameras? In this example, is absolute advantage the same as comparative advantage, or not? In what product should Germany specialize? In what product should Poland specialize?
Does intra-industry trade contradict the theory of comparative advantage?
Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producing autos? What is the opportunity cost of producing one pound of beef In Brazil? What is the opportunity cost of producing one pound of beef in the United States?
Why might intra-industry trade seem surprising from the point of view of comparative advantage?
From earlier chapters you will recall that technological change shifts the average cost curves. Draw a graph showing how technological change could influence intra-industry trade.
How does comparative advantage lead to gains from trade?
The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative D and for the United States is alternative S. China Production Possibilities Product D E F A B 20,000 16,000 0 8 с 12,000 16 Apparel Chemicals (tons) 4,000 0 8,000 24 32 40 U.S. Production Possibilities Product S T U V W Apparel R 60,000 48,000 0 12 36,000 24,0000 12,000 0 Chemicals (tons) 24 36 48 60 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? (Click to select) If so, what product should each produce? China should produce [(Click to select) The United States should produce [(Click to select) b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: units Chemicals: ton(s) c. What are the limits of the terms of trade? units of apparel for 1 ton of chemicals and…
The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons. Gamma's production possibilities A B C D E Tea 120 90 60 30 0 Pots 0 30 60 90 120 Sigma's production possibilities A B C D E Tea 40 30 20 10 0 Pots 0 30 60 90 120 Assume that before specialization and trade, Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage, the gains from specialization and trade will be Multiple Choice 40 tons of pots. 20 tons of tea and 20 tons of pots. 20 tons of tea. 40 tons of tea.
The table below shows the production possibilities for Canada and Japan. Suppose that, prior to specialization and trade, both Canada and Japan are producing combination C. Product DVD players Bushels of wheat Product DVD players Bushels of wheat 100 players 80 60 A 20 0 A Canada A 40 0 B 15 20 B 30 7.5 CANADA'S PRODUCTION POSSIBILITIES C 10 40 JAPAN'S PRODUCTION HACH POSSIBILITIES C 20 15 Tools PP Curve combination Trading Possil New combina 80 E 30 0 0 E A
Figure 2-9 Snow cones 240 0 Greenland 200 Popsicles Snow cones 270 0 Iceland O 100 popsicles & 130 snow cones; 100 popsicles & 140 snow scones O 100 popsicles & 140 snow cones; 100 popsicles & 100 snow scones O 140 popsicles & 120 snow cones; 100 popsicles & 130 snow scones none of the above. 180 Popsicles Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. With the opening of international trade, the agreed price between Iceland and Greenland for popsicles is 1.3. Assume that the country which now imports popsicles (with int'l trade) decides that it will import 100 units of popsicles. The new consumption bundles/points after international trade for Greenland and Iceland, respectively, are?
2. The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product-mix for China is alternative B and for the United States alternative U. Production Possibilities: China Product A B C D E F Apparel 150,000 120,000 90,000 60,000 30,000 0 Chemicals (in Tons) 0 30 60 90 120 150 Production Possibilities: United States Product R S T U V W Apparel 50,000 40,000 30,000 20,000 10,000 0 Chemicals (in Tons) 0 20 40 60 80 100 c. What are the limits of the terms of trade?Limits of the terms of trade = 1,000 units of apparel for____ ton of chemicals and 1,000 units of apparel for_____ tons of chemicals.
Suppose that Poland and Wales both produce ale and glass. Poland's opportunity cost of producing a pane of glass is 4 kegs of ale while Wales's opportunity cost of producing a pane of glass is 12 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell thatWales has a comparative advantage in the production of glass andPoland has a comparative advantage in the production of ale. Suppose that Poland and Wales consider trading glass and ale with each other. Poland can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Poland to gain from trade? Check all that apply. 8 kegs of…