ECON 2023 Lecture Notes - Lecture 14: Protective Tariff, Import Quota, Export Restriction

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ceruleankoala833

6 Dec 2016

School

University of Arkansas

Department

Economics

Course

ECON 2023

Professor

Jeff Cooperstein

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Document Summary

Ab s o lu te a d va n ta g e = not n e c e s s a rily c o m p a ra tive a d va n ta g e. =u. s . ca n produce more for both goods tha n the othe r. B s a crifice d pe r unit of producing a. Ca lcula te opportunity cos t for e a ch produce r (na tion) J a y: 5/20= 1/4 (give up 4 ca r to ge t one unit of la wn) Le a h: 3/15= 1/5 (give up 5 ca r to ge t one unit of la wn) Inte rna tiona l tra de (aus tra lia & gre e ce ) Op p o rtu n ity c o s t. Gre e ce produce s wine (import be e f from aus tra lia )

Related Questions

3.In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios.

3-1)Who has the absolute advantage in the production of rubber or radios? How can you tell?

3-2)Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine.) Which country has a comparative advantage in the production of radios?

3-3)Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber?

3-4)In this example, does each country have an absolute advantage and a comparative advantage in the same good, or not?

3-5)In what product should Japan specialize? In what product should Malaysia specialize?

1) The following table shows the production capabilities for extra workers for New Zealand and Australia in potato and carrot harvesting.

Output per Additional Worker per Annum

	Potatoes	Carrots
	(tonnes)	(tonnes)

New Zealand	60	90

Australia	50	30

i) Identify which country has an absolute advantage in harvesting potatoes and which country has an absolute advantage in harvesting carrots.

ii) Based on the table above, provide the missing answers to the following questions as a ratio:

1) New Zealand must give up _____ tonnes of potatoes in order to produce one additional tonne of carrots.

2) Australia must give up _____ tonnes of potatoes in order to produce one additional tonne of carrots.

3) The opportunity cost in New Zealand of producing one tonne of potatoes is _____ tonnes of carrots.

4) The opportunity cost in Australia of producing one tonne of potatoes is _____ tonnes of carrots.

iii) Using the information from (ii), analyse whether there is a basis for trade between New Zealand and Australia. If there is, identify what products each country should produce and trade.

crimsonimpala955

5. Part A

A point inside the production possibilities frontier is

	A. efficient, but not feasible.
	B. feasible, but not efficient.
	C. both efficient and feasible.
	D. neither efficient nor feasible.

Part B

If at its present point of production Germany must give up 10 units of beer (measured on the vertical axis) to produce one more unit of bread (measured on the horizontal axis), its ____________ of producing another unit of beer is ____________.

a.	absolute advantage; 1/10
b.	opportunity cost; 1/10
c.	comparative advantage; 1/10
d.	opportunity cost; 10

chocolateporpoise891

ECON 2023 Lecture Notes - Lecture 14: Protective Tariff, Import Quota, Export Restriction

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