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Macroeconomic

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Sanjay Saini
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26 views3 pages

Macroeconomic

Uploaded by

Sanjay Saini
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.

Based on the information given blow about US & Japan, answer


the following questions:

US & JAPAN

US JAPAN

Cars 12 10

Computer
4 6
s

US:                                                   JAPAN:


1car = 0.33 computer   1 car = 0.6 computer
1computer =3 car        1 computer = 1.66 car

 What is the US’s opportunity cost of making cars?

A – 4 Computers

 What is Japan’s opportunity cost of making cars?

A – 6 Computers

 What is US’s opportunity cost of making computers?

A – 12 cars

 What is Japan’s opportunity cost of making computers?

A – 10 cars

 Who has the absolute advantage in cars?

A – U.S has absolute advantage in cars.

 Who has the absolute advantage in computers?

A – Japan absolute advantage in computers

 Who has the comparative advantage in cars?

A – U.S comparative advantage in cars.


 Who has the comparative advantage in computers?

A – Japan comparative advantage in computers.

 Which country should produce which good and why?

If U.S produce car, then its good because they are having both the
comparative and absolute advantages.
If Japan produce computer, then its good because they are having
both the comparative and absolute advantages.

ANDY & HANNAH

Andy Hannah

80
cleaning offices 40 minutes
minutes

cleaning jail 50
35 minutes
cells minutes

ANDY:                                                         HANNAH:


1 office = 0.625 jail cells                            1 office = 0.875jail cells
1 jail cell = 1.6 office                           1 jail cell = 1.142 office

  What is Andy’s opportunity cost of cleaning offices in terms of


cleaning jail cells?

A - 50 minute of cleaning jail cells

  What is Hannah’s opportunity cost of cleaning offices in terms of


cleaning jail cells?

A – 35 minute of cleaning jail cells

  What is Andy’s opportunity cost of cleaning jail cells in terms of


cleaning offices?

A -80 minute of cleaning office cells

  What is Hannah’s opportunity cost of cleaning jail cells in terms of


cleaning offices?

A – 40 minute of cleaning office cells


  Who has the absolute advantage in cleaning offices?

A – Andy

  Who has the absolute advantage in cleaning jail cells?

A - Andy

  Who has the comparative advantage in cleaning offices? 

A - Andy

  Who has the comparative advantage in cleaning jail cells?

A - Andy

  Who should do which choose and why?

A - Both I would suggest to give andy .

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