Imports/Exports Contente\'s opportunity cost of producing one bushel of corn is
ID: 1093627 • Letter: I
Question
Imports/Exports
Contente's opportunity cost of producing one bushel of corn is _____ (1/4, 2, 1/2, 4) pair/pairs of jeans, and Felicidad's opportunity cost of producing one bushel of corn is _____ (1/2, 1/4, 2, 4) pair/pairs of jeans. Therefore ______(Contente/Felicidad) has a comparitive advantafe in the production of corn, and ____ (Felicidad/Contente) has a comparative advantage in the production of jeans.
Suppose that Contente completely specializes in the production of the good in which it has a comparative advantage producing only that good. It will Produce ___(500,2000,2400,1200) ________(corn,jeans)
Suppose also that Felicidad does not specialize and uses 18000 hours of labor to produce corn and 6000 hours of labor to produce jeans. It will produce (1200,900,500) bushels of corn and _____(2000,600, 2400) pairs of jeans.
Suppose Contente and Felicidad agree to trade with each other, exchanging 450 bushels of corn for 1350 pairs of jeans. In particular, Contente will export the goods it produces and Felicidad will export the goods that Contente does not produce.
With trade, Contente will ______(import/export) corn and ______(import/export) jeans. Felicidad will _____(import/export) corn and _____(import/export) jeans.
When neither country specializes the total production of corn is _____(675,2600,2300,900) bushels per month and the total production of jeans is _____(2600,2300,675,900) pairs per month.
When contente specializes and Felicidad still produces the combination of goods using 18000 hours of labor to produce corn and 6000 hours of labor to produce jeans, the total production of corn becomes ____(2600,2300,900,675) bushels per month and the total production of jeans became ______(2300,675,2600,900) pairs per month.
Consider two neighboring island countries, Contente and Felicidad. Each has 24,000 labor hours available per month that it can use to produce corn, jeans, or a combination of both. The following table shows the amount of labor hours required to produce one bushel of corn or one pair of jeans. Initially, suppose Contente uses 18,000 hours of labor per month to produce corn and 6,000 hours per month to produce jeans, while Felicidad uses 6,000 hours of labor per month to produce corn and 18,000 hours per month to produce jeans. Consequently, Contente produces 375 bushels of corn and 500 pairs of jeans, and Felicidad produces 300 bushels of corn and 1,800 pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces.Explanation / Answer
Contente's opportunity cost of producing one bushel of corn is 4 pair/pairs of jeans, and Felicidad's opportunity cost of producing one bushel of corn is 2 pair/pairs of jeans. Therefore Felicidad has a comparitive advantafe in the production of corn, and Contente has a comparative advantage in the production of jeans.
Suppose that Contente completely specializes in the production of the good in which it has a comparative advantage producing only that good. It will Produce 2000 jeans.
Suppose also that Felicidad does not specialize and uses 18000 hours of labor to produce corn and 6000 hours of labor to produce jeans. It will produce 900 bushels of corn and 600 pairs of jeans.
Suppose Contente and Felicidad agree to trade with each other, exchanging 450 bushels of corn for 1350 pairs of jeans. In particular, Contente will export the goods it produces and Felicidad will export the goods that Contente does not produce.
With trade, Contente will import corn and export jeans. Felicidad will export corn and import jeans.
When neither country specializes the total production of corn is 675 bushels per month and the total production of jeans is 2300 pairs per month.
When contente specializes and Felicidad still produces the combination of goods using 18000 hours of labor to produce corn and 6000 hours of labor to produce jeans, the total production of corn becomes 900 bushels per month and the total production of jeans became 2600 pairs per month.