Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per week that they can use to produce

Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor Country Rye. Jeans Arcadia. 6 bushels per hour. 12 pair per hour Dolorium. 4 bushels per hour. 16 pairs per hr Initially, suppose Arcadia uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Arcadia produces 6,000,000 bushels of rye and 36 million pairs of jeans and Dolorium Produces 12,000,000 bushels of rye and 16 million pairs of jeans assume there are no other countries willing to trade goods so in the absence of trade between these two countries each country consumes amount of rye and jeans it produces. Arcadia's Opportunity cost of producing one bushel of rye is ______Of jeans and Dolorium 's opportunity cost of producing one bushel of rye is ______ of jeans. Therefore, _________Has a comparative advantage in the production of rye and _____Has a comparative advantage in the production of genes suppose that each country completely specializes in the production of good and which it has a comparative advantage producing only that good. In this case the country that produces right will produce______Million bushels per week in the country that produces jeans will produce_____ Million pairs per week. In the following table enter each country's production decision on the third row the table marked production suppose the country they produce is rye trades 14,000,000 bushels to the other country in exchange for 42 million pairs of jeans. In the following table select amount of each girl that each country exports and imports in boxes across the road Mart trade action an answer each country is final consumption of each good on my mark consumption. When the two countries did not special is the total production of rye was 18, million bushels per week and the total production of jeans was 52 million pairs per week. Because the specialization the total production of rye has increased by_______Million bushels per week and the total production of jeans has increased by_________Million pairs per week. Because the two countries produce more right and wore jeans and a specialization each country is able to gain from trade calculate the games from Trey that is the amount but which each country has increased is consumption of each good relative to the first row of the table and the following table into this difference in boxes across the last row marked in case and consumption

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Rediscovering Sustainability Economics Of The Finite Earth

Authors: ARG Heesterman

1st Edition

1317069846, 9781317069843

More Books

Students also viewed these Economics questions