Question

If Texia specializes in food, it can produce 1,000 units of food and 0 units of...

If Texia specializes in food, it can produce 1,000 units of food and 0 units of clothing this year. Ifit specializes in clothing, it can produce 500 units of clothing and 0 units of food. This year Urbania can produce either 500 units of food and 0 units of clothing or 200 units of clothing and 0 units of food (assume linear production possibility frontiers)

a) Texia; Texia

b) Texia; Urbania

c) Urbania; Texia

d) Urbania; Urbania

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

What is the question here? If the idea is comparative advantage. Then in case of Texia the opportinity cost of 1 unit of clothing is 2 units of food. In case of Urbania, the opportunity cost of 1 unit of clothing 2.5 units of food. Thus as the opportunity cost for for Urbania is greater, Texia has a comparative advantage in clothing. For Texia the opportunity cost of 1 unit of food is 1/2 unit of clothing. For Urbania this is 2/5 units of clothing. So Urbania has a comparative advantage in food.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Iceland can produce 32 units of food per person per year or 8 units of clothing...
Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? a. ​ Iceland has a comparative advantage, but not an absolute advantage in producing food. b. ​ Lavaland has both a comparative and absolute advantage in producing clothing. c. ​ Lavaland has both a comparative and absolute advantage in...
Iceland can produce 32 units of food per person per year or 8 units of clothing...
Iceland can produce 32 units of food per person per year or 8 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? A. Lavaland has both a comparative and absolute advantage in producing food. B. Iceland has a comparative advantage but not an absolute advantage in producing food. C. Iceland has both a comparative and absolute advantage in producing food. D....
If there are only two countries and two goods in a highly simplified world, America can...
If there are only two countries and two goods in a highly simplified world, America can produce at most 200 cars or at most 100 tons of grain per year, whereas Japan can produce at most 400 cars or at most 50 tons of grain per year. a. Draw the linear production possibility frontier for the American economy. (Please use vertical axis to represent cars and use horizontal axis to represent grain.) b. Draw the linear production possibility frontiers for...
Assume that Japan and France each have 1,000 production units. With one production unit, Japan can...
Assume that Japan and France each have 1,000 production units. With one production unit, Japan can produce either 10 containers of toys or 7 cases of wine. Japan can produce either 2 cases of toys or 7 cases of wine. Thus, a production unit in Japan is 5 times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. Japan allocates 800 producing units to building toys and...
Suppose that in the United States 4 worker-hours are required to produce each unit of clothing...
Suppose that in the United States 4 worker-hours are required to produce each unit of clothing and each unit of food. In Canada, 1 worker-hour is required for each unit of clothing and 2 worker hours are required for a unit of food. Show your work. A. Assuming that each country has 40 worker-hours of labor available for production, draw the production possibilities frontiers for each country. What do the slopes of these frontiers indicate? (Place Food on the Vertical...
Consider our usual setting with two goods (food and clothing) and two inputs (capital and labor)....
Consider our usual setting with two goods (food and clothing) and two inputs (capital and labor). Units of labor and capital respectively needed to produce one unit of food are given by LF = 4, KF = 1, meaning that you need 4 units of labor and 1 unit of capital to produce 1 unit of food. The input requirements to produce one unit of clothing are given by LC = 1, KC = 2. Denote LC and KC as...
There are two countries (Country A and Country B) that produce bluray disks and bags of...
There are two countries (Country A and Country B) that produce bluray disks and bags of microwave popcorn. Country A can produce either 100,000 bluray disks and 0 bags of popcorn per month, or 0 bluray disks and 200,000 bags of popcorn per month. Country B can produce either 80,000 bluray disks and 0 bags of popcorn per month, or 0 bluray disks and 80,000 bags of popcorn per month. Sketch two graphs representing the production possibility frontiers of the...
Country A has 25,000 units of labor and can produce 2 goods, manufactures and food. A’s...
Country A has 25,000 units of labor and can produce 2 goods, manufactures and food. A’s producers take 5 units of labor to produce one unit of manufactures and 1 unit of labor to produce one unit of food. Country B has 33000 units of labor and takes 3 units to produce one unit of manufactures and 2 units to produce one unit of food. What is price of manufactures in terms of food at which A and B would...
1. Two countries A and B both produce food and clothing. Country A can produce both...
1. Two countries A and B both produce food and clothing. Country A can produce both food and clothing using fewer resources than B. According to international trade theory A. Country A and B profitably specialize and trade with each other B. Country A and B should specialize in the good for which they each have a comparative advantage and then trade with one another C. Country B should specialize in both goods and trade with country A D. Country...
Bert has an initial endowment consisting of 10 units of food and 10 units of clothing....
Bert has an initial endowment consisting of 10 units of food and 10 units of clothing. Ernie’s initial endowment consists of 10 units of food and 20 units of clothing. Bert regards food and clothing as perfect 1-for-1 substitutes. Ernie regards them as perfect complements, always wanting to consume 3 units of clothing for every 2 units of food.(Draw all lines and curves on the same table and number the intercepts). a. Draw the indifference curve of Bert that goes...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT