Assume the table below shows the quantities of automobiles and computers that a
ID: 1137307 • Letter: A
Question
Assume the table below shows the quantities of automobiles and computers that a worker can produce in a day in the United States and Japan Computers 24 12 Automobiles United States Japan 4 Suppose each country has 2,000 workers and consumes the following (per day) without trade from allocating 1,000 workers to automobile production and 1,000 workers to computer production United States Japan Automobiles 2,000 4,000 Computers 24,000 12,000 If both countries specialize completely by producing only that for which they have a comparative advantage and then trade 2,000 automobiles for 12,000 computers, what will each country's consumption of automobiles and computers be? To answer this question, fill in the table below with the amounts of automobiles and computers the United States and Japan will consume with specialization and trade. (Enter your responses as whole numbers.) Automobiles Computers United States Japan 6000Explanation / Answer
Answer
Answer
The comparative advantage depends on the opportunity cost
The opportunity cost of x=maximum output of y /maximum output of x
The opportunity cost of Automobiles to US=24/2=12
The opportunity cost of Automobiles to Japan=12/4=3
The opportunity sot of Automobiles is lower for Japan means Japan have the comparative advantage in Automobiles and The US in Computers(one country have the comparative advantage in one good for two good model)
After specialization, The US will produce 24000 computers and Japan will produce 4000 Automobiles and they trade 2000 Automobiles for 12000 Computers
so the table is