The U.S. can make 60 units of wheat or 120 cars. Canada can make 160 units...

The U.S. can make 60 units of wheat or 120 cars. Canada can make 160 units of wheat or 80 cars.

>What are the opportunity costs in each nation?

>Which nation has a comparative advantage in cars? In wheat?

Imagine the two nations are not trading with each other. The U.S. produces and consumes 40 cars and 40 wheat. Canada produces and consumes 40 cars and 80 wheat.

>What is the total productio of cars and wheat?

Now suppose each nation specializes and only makes the product for which it has a comparative advantage.

>What is the new total production of cars and wheat?

Next, suppose the U.S. trades 60 units of the good it specializes in to Canada in return for 60 units of the good Canada specializes in.

>How much more or less can each nation consume compared to the siutation in which it did not trade?

Solutions

Expert Solution

The United States exhibits a mixed system characterized by the private ownership of some resources and the public ownerships of other resources. The government is directly involved in almost one-third of all the economic activities occurring in the nation.

The command elements in the system allow government at all levels in the United States to regulate the private sector. Federal government has been regulating the workplace, ensuring the safety and environmental quality, alongwith complete competitive fairness in many activities. Local governments at their level, regulate economic activates of their jurisdiction.

Market elements in the United States permit the private sector to determine the prices of their product. Private property rights ensure that profitable business opportunities are available. Traces of capitalism and command system can, thus, be easily seen. As for the traditional elements, some occupation in the United States including the occupations in cosmetic industry are women-dominated and some other occupations are men-dominated.

Rahul Sunny answered 1 year ago

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