Question
Below are the data for the maximum production of the only two products for the countries of Oz and Zas. Oz: 28 food units or
Below are the data for the maximum production of the only two products for the countries of Oz and Zas.
Oz: 28 food units or 42 equipment units
Zas: 56 food units or 28 equipment units
a. If each country is self-sufficient, with no trade between them, and each uses one-half of its resources to produce each of the two products, what is the output in each country. Fill in the table below.
Country | Output of food units | Output of equipment units |
Oz | ||
Zas |
b. Based on part (a), total production of food is units and total production of equipment is units. c. If, instead, each country specializes and produces only the product that it can produce best, what will be the output in each country? Fill in the table below.
Country | Output of food units | Output of equipment units |
Oz | ||
Zas |
d. Now, based on part (c), total production of food is units and total production of equipment is units. e. The gains as a result of specialization are more units of food produced and more units of equipment produced.
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