ECON-101 Lecture Notes - Lecture 3: Absolute Advantage, Demand Curve, Comparative Advantage
2 Apr 2016
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We will look at how much of both goods each country produces and consumes: if the country chooses to be self-sufficient if it trades with the other country. Use the following information to draw canada"s ppf. Canada has 50 000 hours of labour available for production per month. Producing one computer requires 100 hours of labour. Producing one ton of wheat requires 10 hours of labour. Use the following information to draw japan"s ppf. Japan has 30 000 hours of labour available for production per month. Producing one computer requires 125 hours of labour. Producing one ton of wheat requires 25 hours of labour. Your graph should measure computers on the horizontal axis. We will compare consumption without trade to consumption with trade. First, we need to see how much of each good is produced and traded by the two countries: suppose canada produces 3400 tons of wheat.
