Discussion section problem set 1 econ 200

Discussion section problem set 1 econ 200 - Problem Set 1...

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Problem Set 1 Discussion Sections Economics 200 We will review Problem 1 in discussion sections beginning Wednesday, September 9. We will review problems 2-5 in discussion sections beginning Wednesday, September 16. 1. There are 10 workers in Canada and each can produce either 2 cars or 30 bushels of wheat. There are 20 workers in the U.S. and each can produce either 5 cars or 40 bushels of wheat. (a) Draw the production possibilities frontier for each country, placing cars on the horizontal axis and wheat on the vertical axis. In each case identify the intercepts and the slope of the production possibilities frontier. (b) Does either country have an absolute advantage in the production of cars? Does either country have an absolute advantage in the production of wheat? (c) What is the opportunity cost of cars in Canada? What is the opportunity cost of cars in the U.S.? (d) Which country has a comparative advantage in the production of cars? (e) In the absence of trade, if Canada consumes 150 bushels of wheat, how many cars can it consume? In the absence of trade, if the U.S.
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