Imagine that it takes an average Australian miner 10 hours to mine a metric tonne of coal
Question:
Imagine that it takes an average Australian miner 10 hours to mine a metric tonne of coal and 20 hours to mine a metric tonne of manganese. It takes the average South African miner 4 hours to mine a metric tonne of coal and 12 hours to mine a metric tonne of manganese.
a. Create a table to show how productive each miner is in a day.
b. For each miner, calculate the opportunity cost of mining a tonne of coal and a tonne of manganese.
c. In what task does each miner have a comparative advantage?
d. Which resource will each country import? How about export?
e. Explain how markets provide the opportunity for the mining companies to specialize and earn gains from trade.
Step by Step Answer:
Principles Of Macroeconomics
ISBN: 9781982166649
1st Canadian Edition
Authors: Betsey Stevenson, Justin Wolfers, Philip Oreopoulos, Kevin Milligan