Suppose it takes a worker in Country A ten hours to produce a beer and twenty hours to produce a pizza. It take a worker in COuntry B two hours to produce a beer and ten hours to produce a pizza. We expect___________to be a net exporter of pizza if these countries trade with one another and follow the theory of comparative advantage.
Which country has the ABSOLUTE advantage in producing pizza? which worker has the ABSOLUTE advantage in producing beer?
Country ACountry B, Country B
EconLan Can produce
0 1 2 3 4 5 6 Pizzas
100 96 90 80 65 40 0 Beers
If the price of one pizza in the world market is twelve beers how many pizza should be produced in Econland?
Suppose in Econland the most caluable bundle of goods possible was being produces and traded efficiently. How many beers could be traded for in Econland? (Price of pizza=12 beers)
What is the hourly wage rate in the graph?
How many units of Pete's Pizza do we expect to be sold in this market?
At a price of $25 is there a surplus or a shortage of Pete's Pizza?
A surplus of 25 pizzas
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