Question

In: Economics

Malaysia can produce 20 tons of fish or 5 tons of rice per month. Thailand can...

Malaysia can produce 20 tons of fish or 5 tons of rice per month. Thailand can produce 25 tons of fish or 20 tons of rice per month.

a) Assuming both countries are using the same amount of capital and labor, which country has the absolute advantage in producing fish? In producing rice?

b) What is the opportunity cost of producing one ton of fish for Malaysia? For Thailand? Show work.

c) What is the opportunity cost of producing one ton of rice for Malaysia? For Thailand? Show work.

d) Which country has the comparative advantage in producing fish? In producing rice?

Solutions

Expert Solution

a) Thailand has absolute advantage in the production of both Fish and Rice. Because Thailand could produce more of both the goods.

b) For Malaysia - Opportunity cost of one ton of fish = total rice/ total fish = 5/20 = 0.25 ton of rice.

For Thailand - Opportunity cost of one ton of fish = total rice / total fish = 20/25 = 0.80 ton of rice.

c) For Malaysia - opportunity cost of one ton of Rice = total fish/rice = 20/5 = 4 ton of fish

For Thailand - opportunity cost of one ton of rice = total fish/ rice = 25/20 = 1.25 ton of fish

D) Comparative advantage is found out by seeing opportunity cost. Country which have less opportunity cost will have comparative advantage in that product.

Malaysia has less opportunity cost in fish so it have comparative advantage in fish.

Thailand has less opportunity cost in rice so it have comparative advantage in rice.

#Please rate positively...thank you

  


Related Solutions

Suppose a worker in Germany can produce 56 computers or 280 tons of grain per month....
Suppose a worker in Germany can produce 56 computers or 280 tons of grain per month. Suppose a worker in Poland can produce 100 computers or 300 tons of grain per month. a. Graph the PPF/PPC for each country on one graph. b. What is the opportunity cost of a computer in Germany? _________ c. What is the opportunity cost of a computer in Poland? ________ d. What is the opportunity cost of a ton of grain in Germany? ______...
Nation 1 can produce Y tons of product A per worker per day and Z tons...
Nation 1 can produce Y tons of product A per worker per day and Z tons of product B per worker per day. Nation 2 can produce G tons of A per worker per day and H tons of product B per worker per day (Y, Z, G, H are numbers of your choice). A. Which nation has an absolute advantage in A? and in B?j B. In Nation 1, what is the opportunity cost of A (in terms of...
Assume that an American worker can produce 5 cars per year of 10 tons of grain...
Assume that an American worker can produce 5 cars per year of 10 tons of grain per year, whereas a Japanese worker can produce 15 cars per year or 5 tons of grain per year. Assume labor is the only input used in car and grain production. a) Which country has the absolute advantage in producing cars? In producing grain? Briefly explain. b) For the United States, what is the opportunity cost of producing a car? What is the opportunity...
Assume you can produce 6 fish per hour or 5 baskets of berries per hour, and...
Assume you can produce 6 fish per hour or 5 baskets of berries per hour, and your neighbor can produce 5 fish per hour or 1 basket of berries per hour. 1) •Who has the absolute advantage in catching fish? In picking berries? How did you determine your answer? 2) •What is your opportunity cost of another fish? 3) •What is your neighbor’s opportunity cost of another fish? 4)•Who has a comparative advantage in catching fish? 5)•What is your opportunity...
Assume that workers in Bulgaria and the U.K. can produce the following (in tons per worker...
Assume that workers in Bulgaria and the U.K. can produce the following (in tons per worker per year): U.S. production/ consumption before trade U.S. Production after specialization US consumption after specialization US Gains from trade Mexico production/ consumption before trade Mexico production after specialization Mexico consumption after specialization Mexico Gains from trade Crops Bulgaria 4 U.K. 10 Machines OR 8 OR 10 a) Which country’s producers have an absolute advantage in producing (a)crops, and (b) machines? Explain. b) Which country’s...
A sugar refinery can produce x tons of sugar per week at a weekly cost of...
A sugar refinery can produce x tons of sugar per week at a weekly cost of 0.1x^2 +9x+1210 dollars. Find the level of production for which the average cost is at a minimum and determine the average cost and marginal cost at that level of production.
An American worker can produce either 5 cars or 9 tons of grain a year. A...
An American worker can produce either 5 cars or 9 tons of grain a year. A Japanese worker can produce either 3 cars or 9 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Complete the following table with the number of workers needed to make one car or 1 ton of grain in the United States and Japan. Workers Needed to Make 1 Car 1 Ton of Grain United States 1/5...
An American worker can produce either 5 cars or 8 tons of grain a year. A...
An American worker can produce either 5 cars or 8 tons of grain a year. A Japanese worker can produce either 4 cars or 9 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Complete the following table with the number of workers needed to make one car or 1 ton of grain in the United States and Japan. Workers Needed to Make 1 Car 1 Ton of Grain United States Japan...
Carleton Chemical claims that they can produce more than 800 tons of benzene on average per...
Carleton Chemical claims that they can produce more than 800 tons of benzene on average per week. A random sample of 36 weeks of production yields a mean and SD as follows: x ̅=823 and s = 79.8. At the = .05 significance level, does the sample data provide significant evidence to support the claim made by the Carleton Company? a) Set up hypotheses Ho and Ha to test the company’s claim. Go to STAT >> TESTS, and choose T-test...
1. XYZ Manufacturing Company buys 50 tons of coal per month. The price of 50 tons...
1. XYZ Manufacturing Company buys 50 tons of coal per month. The price of 50 tons of coal can vary from month to month according to the table shown below: Price of 50 Tons of Coal Probability $1500 0.20 $2000 0.50 $2500 0.30 How much should XYZ budget for coal in 2020? Your answer should be an integer. 2. Replacement times for computer displays players are normally distributed with a mean of 7.1 years and a standard deviation of 1.4...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT