Problem Set 17-18 (ECO100) - Prof Gustavo Indart Department...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Prof. Gustavo Indart Department of Economics University of Toronto ECO 100Y INTRODUCTION TO ECONOMICS Problem Set 17-18 1. In Canada, one ton of wheat requires 1/50 unit of resource and 1 microchip requires 1/20 unit of resource to produce. In Japan, one ton of wheat requires ½ unit of resource and 1 microchip requires 1/12 unit of resource to produce. For simplicity, we assume that these are the only two countries in the world. a) Which country has an absolute advantage in the production of wheat? of microchips? b) What is the opportunity cost of producing a ton of wheat in Canada? In Japan? c) What country has a comparative advantage in the production of wheat? microchips? d) Suppose Canada is endowed with two units of this all-purpose resource while Japan is endowed with 10 units. Draw each country's production possibility curve in separate diagrams with wheat on the vertical axis. e) Suppose that prior to trade, each country allocated half of its resource endowments to the production of each good. Indicate the production and
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern