Digital Camera Wheat (bushels) hina 100 90 50 30 outh Korea a. b. Which country
ID: 1135749 • Letter: D
Question
Digital Camera Wheat (bushels) hina 100 90 50 30 outh Korea a. b. Which country has an absolute advantage in the production of wheat? Which country has an absolute advantage in the production of digital cameras? c. What is China's opportunity cost of producing one digital camera? d. What is China's opportunity cost of producing one bushel of wheat? e. What is South Korea's opportunity cost of producing one digital camera? f. What is South Korea's opportunity cost of producing one bushel of what? g. If each country specializes in the production of the product in which it has a comparative advanta who should produce digital cameras? h. If each country specializes in the production of the product in which it has a comparative advantag who should produce wheat? Suppose we are analyzing the market for Gatorade. Graphically illustrate (including both a supply and demand curve) the impact each of the following would have on demand or supply. equilibrium price and quantity have changed. PLEASE DRAW FIVE (5) SEPARATE GRAPHs FOR Also show how D ADLIS MUST START AT EOUILIBRIUMExplanation / Answer
(a) China has an absolute advantage in the production of digital cameras because it produces more digital cameras with given resources.
(b) China has an absolute advantage in the production of wheat because it can produce more wheat also with given resources.
(c) China's opportunity cost of producing one digital camera is 50/100 =0.5 bushel of wheat.
(d) Chinas opportuníty cost of producing one bushel of wheat is 100/50 = 2 digital cameras.
(e) South korea's opportunity cost of producing one digital camera is 30/90 =0.33 bushel of wheat.
(f) South Korea's opportunity cost of producing one bushel of wheat is 90/30= 3 digital cameras.
(g) If each country specializes in the production of the product in which it has a comparative advantage ,then South Korea should produce digital cameras because it has a lower opportunity cost of producing cameras.
(h) Similarly, China should produce wheat, it has a comparative advantage in producing it because it has lower opportunity cost of producing wheat.