homework2spring2008

homework2spring2008 - Economics 102 Spring 2008 Homework #2...

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Spring 2008 Homework #2 Due in class on 2/25/08                        On your homework please include at the top of the first page your name, TA name, and the  section number for the discussion section you attend. All homeworks should be legible and  neat: do a professional looking job! 1. Absolute and Comparative Advantage  The U.S. and China produce two goods – t-shirts and sweaters. The U.S. has 100  workers and China has 200 workers. Assume that labor is the only factor of production  used in making these goods. With 100 workers the U.S. can either produce 1,000 t-shirts  or 300 sweaters. With 200 workers China can produce 1000 t-shirt or 500 sweaters. i) Assume the production possibility frontier (PPF) is linear. Draw the PPF for each  country ii) Which country has the absolute advantage in the production of sweaters? Which  country has the absolute advantage in the production of t-shirts? 1
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homework2spring2008 - Economics 102 Spring 2008 Homework #2...

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