Homework Answers
1. As the production of Wheat in the US is more, therefore, US has an absolute advantage in Wheat
2. Canada opportunity cost for Wheat = 100 / 40 = 2.5 tons lumber
3. Canada opportunity cost for lumber = 40 / 100 = 0.4 bushel wheat
4. US opportunity cost for Wheat = 30 / 60 = 0.5 tons lumber
US opportunity cost for lumber = 60 / 30 = 2 bushel wheat
The US has a comparative advantage in Wheat and Canada has a comparative advantage in lumber
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Practice Problem Canada and the US both produce wheat and lumber. Assuming Canada and the US...
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1. Below is production levels of lumber and oll for the United States and Canada. Country Lumber Production (using 50 worker hours) 100 200 Oil Production (using 50 worker hours) 150 50 United States Canada a. Calculate the opportunity cost of producing 100 units of lumber for U.S. b. Calculate the opportunity cost of producing 200 units of lumber for Canada. C. Calculate the opportunity cost of producing 150 units of oil for U.S. d. Calculate the opportunity cost of...
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Suppose that the United States and Canada can each produce two products: lumber and beef. Create...
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uppose that the United States and Canada can each produce two products: lumber and beef. Create...
uppose that the United States and Canada can each produce two products: lumber and beef. Create a table like the one below, showing labor requirements per unit of output for each country. (Hint: Choose numbers for each country that are easily divisible by one another.) Labor Requirements per Unit of Output United States Canada Lumber 8tons 16tons ' Beef 10tons 5tons What does absolute advantage mean? How do you calculate absolute advantage? In what output(s) does the U.S. have an...
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