Homework Answers
Answer :
From the above given table it can be concluded that :
Country X can either produce 200 units and of coffee (point A) or 200 units of sugar (point F)
Thus the opportunity cost to Country X for producing 1 unit of coffee = (200/200) units of sugar = 1 unit of sugar
Now, Country Y can either produce 100 units of coffee (point A) or 150 units of sugar (point F)
Thus the opportunity cost to Country Y for producing 1 unit of coffee is = (150/100) units of sugar = 1.5 units of sugar
Thus Country X has a comparative advantage in the production of coffee with respect to Country Y, since its opportunity cost for producing coffee is lower (1 unit of sugar < 1.5 units of sugar).
Similarly Country Y has a comparative advantage in the production of sugar with respect to Country X.
Also by rule countries should focus on the production of only those goods where it has a comparitive advantage
Thus Country X should produce coffee and export it to Country Y and simultaneously Country Y should produce sugar and export it to Country X.
Answer : Option D
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it asks to plot 4 points each please help
The accompanying hypothetical production possibilities tables are for New Zealand and Spain. Each country can produce apples and plums. New Zealand's Production Possibilities Table M4lions of Bushels Production Alternatives Product A B с D Apples @ 23 40 60 Pluns 15 10 15 Spain's Production Possibilities Table (Millions of Bushels) Production Alternatives Product R s T U Apples @ 20 40 60 Plums 60 40 20 a plot the production possibile...
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