Question
Please explain to me the following problems: 2.American and Japanese workers can each produce 4 cars a year. American workers can produce 10tons of grain
Please explain to me the following problems:
2.American and Japanese workers can each produce 4 cars a year. American workers can produce 10tons of grain a year, whereas Japanese workers can produce 5 tons a grain a year. To keep things simple, assume that each country has one hundred million workers. A) For this situation, construct a table analogous to the table in Figure 1. B) Graph the production possibilities frontier of the American and Japanese economies. C) For the United States, what is the opportunity cost of a car? Of Grain? For Japanese, what is the cost of a car? Of grain? Put this information in a table analogous to Table 1. D) Which country has an absolute advantage in producing cars? In producing grain? E) Which country has a comparative advantage in producing cars? In producing grain? F) Without trade half of each country's workers produce cars and the other half produce grain. What quantities of cars and grain does each country produce? G) Starting from a position without trade give an example in which trade makes each country better off.
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