Consider 2 neighboring island called dolorium & arcadia.each have 4million labor
ID: 1236814 • Letter: C
Question
Consider 2 neighboring island called dolorium & arcadia.each have 4million labor hours available per week that they can useto produce what, jeans or both. table below shows amount of wheat or jeans can b produced using 1hr of labor. Wheat(bushels per hr. oflabor) Jeans(pairsper hr.of labor) Dolorium 4 16 Arcadia 6 12 Suppose Arcadia uses 1 million hrs of labor per week toproduce wheat & 3 million hrs per week toproduce jeans, while Dolorium produces 16 million pairsof jeans & 12 million bushels of wheat, and Arcadiaproduces 36 million pairs of jeans & 6million bushels of wheat.Assume ther r no other countries willing to trade goods, so in theabscene of trade between these 2 countries, each countryconsumes the amount of wheat&jeans it produces. Doloriums opportunity cost of producin one bushel ofwheat is_______pair(s) of jeans, and Arcadia opportunity cost ofproducing one bushel of wheat is ______ pair(s) of jeans.Therefore _________(choose either Arcadia or Doloriums) has acomparative advantage in production of jeans. Suppose each country specializes in production of goodthat has comparative advantage, producing only that good, that casethe country that produces wheat will produce_______million bushelsper week and country produces jeans will produce____millionpairs per week Consider 2 neighboring island called dolorium & arcadia.each have 4million labor hours available per week that they can useto produce what, jeans or both. table below shows amount of wheat or jeans can b produced using 1hr of labor. Wheat(bushels per hr. oflabor) Jeans(pairsper hr.of labor) Dolorium 4 16 Arcadia 6 12 Suppose Arcadia uses 1 million hrs of labor per week toproduce wheat & 3 million hrs per week toproduce jeans, while Dolorium produces 16 million pairsof jeans & 12 million bushels of wheat, and Arcadiaproduces 36 million pairs of jeans & 6million bushels of wheat.Assume ther r no other countries willing to trade goods, so in theabscene of trade between these 2 countries, each countryconsumes the amount of wheat&jeans it produces. Doloriums opportunity cost of producin one bushel ofwheat is_______pair(s) of jeans, and Arcadia opportunity cost ofproducing one bushel of wheat is ______ pair(s) of jeans.Therefore _________(choose either Arcadia or Doloriums) has acomparative advantage in production of jeans. Suppose each country specializes in production of goodthat has comparative advantage, producing only that good, that casethe country that produces wheat will produce_______million bushelsper week and country produces jeans will produce____millionpairs per weekExplanation / Answer
The opportunity cost for a comparative advantage problem like thisis just the number of goods that you are giving up per unit timedivided by the number of goods that you are making instead. So ifyou are making 16 pairs of jeans in one hour, but you could bemaking 4 bushels of wheat, your opportunity cost is 16 jeans / 4bushels of wheat = 4 jeans per bushel of wheat. The firm or placethat has a greater opportunity cost of any particular good is theone with the comparitive advantage of that good. That said, the answers are, in order: 4 2 Dolorium. 24 64