Week 2 Critical

A
| no(prenominal) of workers required to invoke|
plain| One elevator car| One ton of scrap|
ground forces| 0.25| 0.1|
Japan| 0.25| 0.2|

B
No. of workers in both countries = $ snow cardinal each
So, if the States produces except Car, they will produce 100/0.25 = 400 million cars
If ground forces produces only caryopsis, they will produce 100/0.1 = 1000 million ton grain
If Japan produces only Car, they will produce 100/0.25 = 400 million cars
If Japan produces only grain, they will produce 100/0.2 = euchre million ton grain

C
For regular army:
opportunity monetary value of car = 1000/400 = 2.5 ton grain
probability cost of grain = 400/1000 = 0.4 car
For Japan:
prospect cost of car = 500/400 = 1.25 ton grain
fortune cost of grain = 400/500 = 0.8 car
D
Neither ground has absolute payoff in producing cars.
the States has an absolute advantage in producing grain.
E
Japan has a comparative advantage in car producing as Japan has lower opportunity cost in producing car.
USA has a comparative advantage in producing grain because of lower opportunity cost in producing grain.

F
Country| Car (in million)| Grain (in million ton)|
USA| 200| 500|
Japan| 200| 250|
Total| 400| 750|

G
If there is no trade, both nation produce car as salutary as grain.



In USA, if 1 worker producing car is engaged to produce grain, USA will lose 4 cars and catch 10 piles of grains per annum.
In Japan, if one worker producing grain is shifted to produce car, Japan will lose 5 tons grain and gain 4 cars per annum.
So, for USA, 4 car = 10 ton grain
For Japan, 4 car = 5 ton grain
If USA and Japan agree to trade and trade agreement is 4 cars = 8 tons of grain, both countries are better off. The USA will produce only grain and trade grain for car. Japan will produce only cars and trade car for grain. So, as per this trade agreement, 1 labor in USA produces 10 ton grain which will get USA 4 cars and 2 ton grain. 1 labor in Japan produces 4 cars and trade this with 8 ton grain. If they produced grain,...If you unavoidableness to get a full essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .