Estimate comparative advantage, Financial Accounting

The only two countries in the world, Alpha and Omega, face the following production possibilities frontiers (all units measured in tons).
Alpha's Production PossibilitiesFrontier Omega's Production PossibilitiesFrontier

1133_average.png

a) Which country has the absolute advantage in producing popcorn?

b) Which country has the absolute advantage in producing peanuts?

c) What is Alpha's opportunity cost of producing one ton of peanuts?

d) What is Omega's opportunity cost of producing one ton of peanuts?

e) Assume that each country decides to use half of its resources in the production of each good. Show these points on the graphs for each country as point A.

f) If these countries choose not to trade, what would be the total world production of popcorn and peanuts based on the points you drew?

g) Now suppose that each country decides to specialize in the good in which each has a comparative advantage. Who has the comparative advantage in peanuts?

h) Who has the comparative advantage in popcorn?

i) By specializing, what is the total world production of each product now?

j) If each country decides to trade 100 units of popcorn for 100 units of peanuts after specializing, show on the graphs the gain each country would receive from trade. Label these points B.

Posted Date: 3/12/2013 5:59:14 AM | Location : United States







Related Discussions:- Estimate comparative advantage, Assignment Help, Ask Question on Estimate comparative advantage, Get Answer, Expert's Help, Estimate comparative advantage Discussions

Write discussion on Estimate comparative advantage
Your posts are moderated
Related Questions
VED Analysis: VED i.e. Vital, Essential and Desirable analysis is a technique employed for spare part inventory analysis and is broadly used in the automobile industry particul

Trade Sources of Information Within for instance the credit card industry it isn't uncommon for information on an individual's credit rating to be shared. In a alike vein withi

Q. What is Capital Gain? Capital Gain - Portion of total GAIN recognized on the sale or exchange of a no inventoryasset that isn't taxed as ORDINARY INCOME. Capital gains have

For each of the ratios listed below, indicate by the appropriate code letter, whether itis a liquidity ratio, a profitability ratio, or a solvency ratio. Code: L=Liquidity rati

I have an assignment due in four hours. Is it possible to get an inquiry if at least half of it can be done within that time?

Alta Velocidad Esperanza de L'Argentina, Sociedad Anónima (AVE), a high-speed railway operator domiciled in Rio Norte, Argentina, is a Foreign Private Issuer as defined by the U.S.


Q. What are Junk Bonds? Junk Bonds - DEBT SECURITIES issued by companies with higher than normal credit risk. Considered ‘non-investment grade' bonds, these SECURITIES ordinari

Limited Liability Partnership (LLP) - GENERAL PARTNERSHIP which, via registration with an appropriate state authority, is able to enshroud all its partners in limited liability. Ru

THE BALANCE SHEET It shows the financial position of the company as at the end of a given financial period. The standard requires that assets and liabilities should be classifi