Two countries are capable of producing beans and whiskey. The first country, Absurdistan, can produce beans at
Question:
Two countries are capable of producing beans and whiskey. The first country, Absurdistan, can produce beans at a cost $15.00 per ton, and whiskey for $5.00 per barrel. The second country, Mongolia, can produce beans for $3.00 per ton, and whiskey for $12.00 per barrel. Calculate the opportunity costs of producing beans & whiskey in each country, and indicate which country has a comparative advantage in which good. Again, explain your reasoning.
[Note: The problem is formulated in terms of money costs, and I've not given you enough information to construct the physical trade-offs between the two goods; so I'm not asking you here to graph the production frontiers.]
2) Use supply & demand curves to explain what might happen in the market for bicycles if the price of gasoline increases.Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair