labor hours available per week that they can use to produce jeans, rye, or a com
ID: 1182434 • Letter: L
Question
labor hours available per week that they can use to produce jeans, rye, or a combination of both. The table below shows the amount of jeans or rye t can be produced using one hour of labor. Jeans (pairs per hour of labor) Corn (Bushels per hour of labor) Dolorium - 16, 4 Contente -10.5 Initially, suppose Contente uses 1 million hours of labor per week to produce corn, and 3 milllion hours per week to produce jeans, while Dolorium uses 3 million hours of labor per week to produce corn and 1 million hours per week to produce jeans. Consequently, Dolorium produces 16 million pairs of jeans and 12 million bushels of corn, and Contente produces 30 million pairs of jeans and 5 millions bushels of corn. Assume there are no other countries willing to trade goods, so in the absence trade between these two countries, each country consumes the amount of jeans and rye it produces. Dolorium's opportunity cost of producing one bushel of corn is ___________________of jeans a) 2 jeans b) 1/2 jeans c) 1/4 jeans d) 4 jeans Contente's opportunity cost of producing one bushel of corn is _______of jeans a) 2 jeand b) 1/2 jeans c) 1/4 jeans d) 4 jeans Therefore, ___________ a) Bellissima b) Felicidad has a comparative advantage in the production of corn and _________ a) Felicidad b) Bellissima has a comparative advantage in the production of jeans. Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that producescorn will produce a) 16 million b) 20 million c) 40 million d) 64 million bushels per week, and the country that produces jeans will produce__________ a) 16 million b) 20million c) 40 million d)64 million pairs per week, In the table below, enter each country's product decision on the second row of the table (marked "Production") Suppose the country that produces corn trades 13 million bushels of corn to the other country in exchange for 39 million pairs of corn. In the table below, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption" When the two countries did not specialize, the total production of corn was 17 million bushels per week and the total production jeans was 46 million pairs per week, Because of specialization, the total production of corn has increased by a) 12 milllion b) 9 million c) 6 million d) 3 million bushels per week, and the total production of jeans has increased by ___________pairs per week a) 16 million b) 12 million c) 18 million d) 24 millionExplanation / Answer
The answer pattern is simple. It goes in this order- D,A,A,B. Opportunity cost of producing jeans for Fel- 32/8=4 Opportunity cost of producing jeans for Bel- 24/12=2 OC for rye production by Fel- 8/32= 1/4 OC for rye production by Bel- 12/24=1/2 hence Bel enjoys a comparative advantage in production of jeans while Fel has a comparative advantage in production of rye. Hope that helps.
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