1 2 Course Homex C O Not secure Exam 1 x openvellum ecollege

Course Homex C O Not secure Exam 1 x openvellum ecollege.com/course.html?courseId=1 4444 19 &OpenVellumi.; 5 O Course Home EC 350 MyEconLab Spring 2018 Section 2 Homework: Chapter 6 Homework Save N Score: 85.82%, 19.74 of Score: 0 of 1 pt Concept: Complete Specialization 2 Assume the table below shows the quantities of automobiles and computers that a worker can produce in a day 12 of 23 (21 complete) Question Help the United States and Japan Automobiles Computers 24 United States Japan 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 Computers United States Japan Automobiles 2,000 4,000 4,000 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,fillin the table below and Japan will consume with specialization and trade. (Enter your responses as whole num with the amounts of automobiles and computers the United States Automobiles Computers United States Japan Enter your answer in the edit fields and then click Check Answer. Clear All Check Answer All parts showing 2:06 PM 1/31/2018 2 ^

Solution

Japan has a comparative advantage in production of automobiles (lower opportunity cost) and US has a comparative advantage in production of computers.

(Japan) Opportunity cost for production of 1 automobile = 4/4 = 1 computer

For US, the same opportunity cost = 24/2 = 12 computers

After specialization:

Total production of automobiles = 4 x 2000 = 8000

Total production of computers = 24 x 2000 = 48000

After trade :

2)

Option c is correct

When trade occurs, countries are better off, but some individuals may be worse off.

	Automobiles	Computers
US	2000	36000
Japan	6000	12000