Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. Part 2 France Germany Wine (Bottles) Cheese (Pounds) Wine (Bottles) Cheese (Pounds) 0 8 0 25 1 6 1 20 2 4 2 15 3 2 3 10 4 0 4 5 5 0 Part 3 Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese? Part 4 A. Neither has a comparative advantage producing wine or cheese. B. France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese. C. France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine. D. France has a comparative advantage producing wine and cheese. E. Germany has a comparative advantage producing wine and cheese. Part 5 Suppose that France is currently producing 1 bottle of wine and 6 pounds of cheese and Germany is currently producing 3 bottles of wine and 10 pounds of cheese. Then, assume instead that France and Germany specialize by producing only the good for which they have a comparative advantage and then trade 3 bottles of wine for 10 pounds of cheese. Part 6 After specialization and trade, France gains by consuming the same amount of wine and enter your response here additional pound(s) of cheese (enter a numeric response using an integer) and Germany gains by consuming the same amount of wine and 00 additional pound(s) of cheese

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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Part 2

France

Germany

Wine (Bottles)	Cheese (Pounds)	Wine (Bottles)	Cheese (Pounds)
0	8	0	25
1	6	1	20
2	4	2	15
3	2	3	10
4	0	4	5
		5	0

Part 3

Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese?

Part 4

Neither has a comparative advantage producing wine or cheese.

France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese.

France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine.

France has a comparative advantage producing wine and cheese.

Germany has a comparative advantage producing wine and cheese.

Part 5

Suppose that France is currently producing 1 bottle of wine and

pounds of cheese and Germany is currently producing 3 bottles of wine and

pounds of cheese. Then, assume instead that France and Germany specialize by producing only the good for which they have a comparative advantage and then trade 3 bottles of wine for

pounds of cheese.

Part 6

After specialization and trade, France gains by consuming the same amount of wine and

enter your response here

additional pound(s) of cheese (enter a numeric response using an integer) and Germany gains by consuming the same amount of wine and

additional pound(s) of cheese.

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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