63 845
Assignments Done
99,2%
Successfully Done
In August 2018

Answer to Question #77807 in Microeconomics for Kay

Question #77807
American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. construct a table
Expert's answer
Amount produced per year (million)
Car Grain
America 400 1000
Japan 400 500

Neither country has an absolute advantage in producing cars, because they are equally productive (the same output per worker); America has an absolute advantage in producing grain, because it is more productive (greater output per worker).
Japan has a comparative advantage in producing cars, because it has a lower opportunity cost in terms of grain given up. The United States has a comparative advantage in producing grain, because it has a lower opportunity cost in terms of cars given up.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions