PLEASE ANSWER THE QUESTION WITH EVIDENCE AND EXPLANATION PLEASE USE THE COUNTRIE

Question

PLEASE ANSWER THE QUESTION WITH EVIDENCE AND EXPLANATION

PLEASE USE THE COUNTRIES (CHINA and FRANCE) AND THE GOODS (BIKES AND CARS)

China and France produce Bikes and Cars. Both goods are manufactured using only one production factor (LABOR). The following table shows the unit labor requirements for each product in each country.

BIKE

CAR

CHINA

2 Hrs.

16 Hrs.

FRANCE

8 Hrs.

8 Hrs.

NOTE: CHINA HAS 10,000 WORKERS AND FRANCE HAS 5,000 WORKERS.

QUESTIONS:

5. Find the global relative quantity of Bikes when China and France are trading.

BIKE

CAR

CHINA

2 Hrs.

16 Hrs.

FRANCE

8 Hrs.

8 Hrs.

Explanation / Answer

Assuming 12 hour working day France will produce 5000 multiplied by 1.5(each worker can produce 1.5 bikes) =7500 bikes. China can produce 10000 multiplied by 6 bikes. But since China will specialise in production of cars, only France will produce 7500 bikes

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