American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers.

a. For this situation, construct a table analogous to the table in Figure.

b. Graph the production possibilities frontier of the American and Japanese economies.
c. For the United States, what is the opportunity cost of a car? Of grain? For Japan, what is the opportunity cost of a car? Of grain? Put this information in a table analogous to Table 1.

d. Which country has an absolute advantage in producing cars? In producing grain?
e. Which country has a comparative advantage in producing cars? In producing grain?
f. Without trade, half of each country’s workers produce cars and half produce grain. What quantities of cars and grain does each country produce?
g. Starting from a position without trade, give an example in which trade makes each country betteroff.

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(a) Production Opportunities Minutes Needed to Make 1 Ounce of: Potatoes 60 min/oz 15 min/oz 20 minvoz 10 min/oz Amount Produced in 8 Hours Meat Meat Potatoes Farmer 8 oz 32 02 Rancher 24 oz 48 Oz (b) The Farmer's Production Possibilities Frontier Meat (ounces) If there is no trade, the farmer chooses this production and consumption 4. 16 32 Potatoes (ounces) (c) The Rancher's Production Possibilities Frontier Meat (ounces) 24 If there is no trade, the rancher chooses this production and consumption 12 24 48 Potatoes (ounces) Table Opportunity Cost of: 1 oz of Meat 1 oz of Potatoes Farmer Rancher 4 oz potatoes oz meat 2 oz potatoes'/2 oz meat