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

prepair two adjusting entries

Q. Lack of assets available to offer as collateral or security? If SMEs wish to access bank finance for instance, then banks will wish to address the information problem referr

accountability through conceptual framework in australia eassy on this topic with research

i.   Explain carefully what is meant by a price earnings ratio. ii   Utilising a valuation model identify and briefly discuss the theoretical determinants of the ratio. iii

Preferential debts These are almost the same as in bankruptcy; with the addition that any person who has advanced money for the payment of wages has the same priority as the pe

Ask questiJohn’s away at the moment, and his email provider has a size limit on the data that can be sent via email. What is a potential solution for John, and name a provider that

Regulated Investment Company (RIC) - Commonly known as a MUTUAL FUND, this is a domestic corporation which acts as an investment agent for its shareholders by typically investing i

Statement of Cash Flows - A statement of cash flows is one of the fundamental financial statements which is required as part of a complete set of financial statements prepared in c

For purposes of rules which apply to top heavy plans, a key employee: 1. An officer of employer earning more than $130,000; 2. An individual who owns more than 5 percent of e