Trade & Foreign Currency Problems

Trade & Foreign Currency Problems - 2. Which country...

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production? production? production? 5. Which country has the comparative advantage in computer production? 6. What are the limits of the terms of trade? Specifically, when is Canada willing to trade with Japan, and when is Japan willing to trade with Canada? Information Needed Amount of Beef or Computers Produced by One Worker in a Day Canada Japan Beef 6 5 Computers 2 4 2 As you can see highlighted in Yellow the Canadian worker has a higher absolute pro in beef as compared to the Japan worker, therefore Canada has the absolute advan 3 As you can see highlighted in Green the Japan worker has a higher absolute produc to the Canadian worker, therefore Japan has the absolute advantage in computer p 4 As we are taught in the book and lectures the comparative advantage is found comp of production in two countries and whoever has the lowest opportunity cost has the in a table the opportunity cost for both countries for the production of Beef. Canada: To produce 6 beefs, the opportunity cost is 2 computers. Japan: To produce 5 beefs, the opportunity cost is 4 computers. 2. Which country has the absolute advantage in beef 3. Which country has the absolute advantage in computer 4. Which country has the comparative advantage in beef
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Therefore, Canada has a lower opportunity cost to produce beefs. Which elects
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This note was uploaded on 08/04/2011 for the course ECN 601 taught by Professor Professor during the Spring '10 term at Grand Canyon.

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Trade & Foreign Currency Problems - 2. Which country...

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