The following table describes production possibilities for Canada and Germany. Each number in the table shows the number of workers needed to produce one unit of the product.
Country
bags
refrigerators
Canada
1
12
Germany
4
5
Suppose that both countries have `90` workers. What is the opportunity cost of producing bags in Canada?
refrigerators
`0.083333333333333`
If I am making bags with one worker how many refrigerators am I giving up? Or in other words, the cost of one bags is how many refrigerators? Divide bags by refrigerators
What is the opportunity cost of producing refrigerators in Canada?
bags
`12`
It might be a good idea to first draw the PPF for Canada and then calculate the slope of PPF.
What is the opportunity cost of producing bags in Germany?
refrigerators
`0.8`
It might be a good idea to first draw the PPF for Germany and then calculate the slope of PPF.
What is the opportunity cost of producing refrigerators in Germany?
bags
`1.25`
It might be a good idea to first draw the PPF for Germany and then calculate the slope of PPF.
Which country has an absolute advantage in producing bags?
Canada
absolute advantage: when one country can use fewer resources to produce a good compared to another country; when a country is more productive compared to another country.
Which country has an absolute advantage in producing refrigerators?
Germany
Absolute advantage: when one country can use fewer resources to produce a good compared to another country; when a country is more productive compared to another country.
Which country has a comparative advantage in producing refrigerators?
Germany
Comparative advantage: when a country can produce a good at a lower cost in terms of other goods; or, when a country has a lower opportunity cost of production.
Which country has a comparative advantage in producing bags?
Canada
Comparative advantage: when a country can produce a good at a lower cost in terms of other goods; or, when a country has a lower opportunity cost of production.
Which country should be specializing in the production of refrigerators?
Germany
The country that has a comparative advantage in the production of the product should specialize in producing it.
Which country should be specializing in the production of bags?
Canada
The country that has a comparative advantage in the production of the product should specialize in producing it.
Which country should be exporting bags?
Canada
The country that has a comparative advantage in the production of the product should specialize in producing it and exporting it.
Which country should be exporting refrigerators?
Germany
The country that has a comparative advantage in the production of the product should specialize in producing and exporting it.
Suppose that Canada takes all of their workers to produce bags. How much of the product can they produce?
`90/1`
How many workers are need to produce one unit? How many can you produce with 90 workers?
Suppose that Canada takes all of their workers to produce refrigerators. How much of the product can they produce?
`90/12`
How many workers are need to produce one unit? How many can you produce with 90 workers?
Suppose that Germany takes all of their workers to produce bags. How much of the product can they produce?
`90/4`
How many workers are need to produce one unit? How many can you produce with 90 workers?
Suppose that Germany takes all of their workers to produce refrigerators. How much of the product can they produce?
`90/5`
How many workers are need to produce one unit? How many can you produce with 90 workers?
Box 1: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 2: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 3: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 4: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 5: Select the best answer
Box 6: Select the best answer
Box 7: Select the best answer
Box 8: Select the best answer
Box 9: Select the best answer
Box 10: Select the best answer
Box 11: Select the best answer
Box 12: Select the best answer
Box 13: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 14: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 15: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity
Box 16: Enter your answer as an integer or decimal number. Examples: 3, -4, 5.5172 Enter DNE for Does Not Exist, oo for Infinity