ECON Chpt 2

longer, good

In The Wealth of Nations, Adam Smith said that one reason specialization makes someone more productive is that "a man commonly saunters a little in turning his hand from one sort of employment to another." How can you use this observation to improve your pattern of studying for your four or five college courses this semester? Spending a ___ time on one subject before moving on to the next is a ___ strategy to maximize the benefits of the time spent studying.

a

Suppose that the 100 people in society J all know the same 10 facts, while the 100 people in society K specialize, with each person knowing 8 unique facts as well as 2 facts also known by the other 99 people in the society. Which of the following is true? a) There are 10 total facts known in society J. b) There are 1,000 total facts known in society J. c) There are 10 total facts known in society K. d) There are 100 total facts known in society J.

false

T/F: Absolute advantage is the source of the potential gains from specialization and trade.

true

T/F: Countries specialize in the production of goods for which they have a comparative advantage.

b

The value of the slope of the PPF reveals: a) productivity. b) the opportunity cost. c) comparative advantage. d) absolute advantage.

d

Trade leads to _____, which can vastly increase productivity. a) opportunity costs b) exploitation c) comparative advantage d) specialization

a

Ultimately, wage rates are determined by: a) the productivity of labor. b) the comparative advantage of labor. c) government regulations. d) firms.

e

Which term best describes the situation that, relative to England, France can produce beef at a lower cost of production (i.e., can produce beef using fewer inputs)? a) appreciating currency b) compound interest c) comparative advantage d) black market e) absolute advantage f) budget constraint

a. 2 b. 800 c. 2.5

"Opportunity cost" is one of the tougher ideas in economics. Let's make it easier by starting with some simple examples. In the following examples, find the opportunity cost: Your answer should be a rate, as in "1.5 widgets per year" or "6 lectures per month." Assume that these relationships are simple linear ones, so that if you put in twice the time you get twice the output, and half the time yields half the output. a. Erin has a choice between two activities: She can repair one transmission per hour or she can repair two fuel injectors per hour. What is the opportunity cost of repairing one transmission? Each transmission costs ___ fuel injector(s) per hour. b. Katie works at a customer service center and every hour she has a choice between two activities: answering 200 telephone calls per hour or responding to 400 emails per hour. What is the opportunity cost of responding to 400 phone calls? 400 phone calls cost ___ email(s). c. Deirdre has a choice between writing one more book this year or five more articles this year. What is the opportunity cost of writing half of a book this year, in terms of articles? One‑half of a book costs ___ article(s) per year.

a

A change in which of the following would result in a change in a country's PPF? a) productivity b) absolute advantage c) demand for inputs d) supply of outputs

c

A farmer produces both beans and corn on her farm. If she must give up 16 bushels of corn to be able to get 6 bushels of beans, then her opportunity cost of 1 bushel of beans is: a) 0.38 bushels of corn. b) 16.00 bushels of corn. c) 2.67 bushels of corn. d) 2.99 bushels of corn.

d

A gardener can produce either beans or corn in her garden. The gardener's opportunity cost of a bushel of beans multiplied by her opportunity cost of a bushel of corn is a) equal to three. b) unknown, because there is not enough information. c) equal to infinity. d) equal to one. e) greater than one but smaller than three. f) equal to two.

b

Absolute advantage can be determined by comparing different producers' a) geographical location. b) input requirements per unit of output. c) comparative advantage. d) opportunity costs. e) input payments, such as wage.

1. Morocco 2. Neither 3. Morocco 4. England

Assume England and Morocco can both produce grain and dates, and that the only limited resource is the farming labor force, meaning that land, water, and all other resources are plentiful in both countries. Each farmer in England can produce 10 t of grain or 5 t of dates in a season. Each farmer in Morocco can also produce 10 t of grain or 25 t of dates. Please answer the four questions. 1. Which country has the absolute advantage in producing dates? England Neither Morocco 2. Which country has the absolute advantage in producing grain? Neither Morocco England 3. Which country has the comparative advantage in producing dates? Morocco Neither England 4. Which country has the comparative advantage in producing grain? Morocco England Neither

a. division of knowledge b. comparative advantage

Categorize each of the following examples into one of these reasons for trade: division of knowledge or comparative advantage. a. Two recently abandoned cats, Bingo and Tuppy, need to quickly learn how to catch mice in order to survive. If they also remain well groomed, they stand a better chance of surviving, because good grooming reduces the risk of disease and parasites. Each cat could go it alone, focusing almost exclusively on learning to catch mice. The alternative would be for Bingo to specialize in learning how to groom well and for Tuppy to specialize in learning how to catch mice well. Bingo and Tuppy will trade because of ___. b. Supreme Court Chief Justice John Roberts hires attorneys who are less skilled than himself to do routine legal work. Justice Roberts hires less‑skilled lawyers because of ___.

a) Gears, Halo b) swap free subscriptions c) offer to love each other

In this chapter, we've often emphasized how specialization and exchange can create more output. But sometimes the output from voluntary exchange is difficult to measure and doesn't show up in GDP statistics. In each of the following cases, explain how the two parties involved might be able to make themselves both better off just by making a voluntary exchange. a. Dana received two copies of Gears of War as birthday gifts. Evan received two copies of Halo Infinite as birthday gifts. Dana could give one copy of ___ to Evan, who could offer one of his copies of ___ to Dana. b. Jeb, who lives in Florida, has a free subscription to Field and Stream but isn't interested in hunting. George, an outdoorsman, has a free subscription to the Miami Herald but isn't all that interested in Florida news. They could ___ and both be better off, especially if both men have the last name Bush. At the very least, both parties are no worse off after the exchange. c. Pat has a lot of love to give, but it is worthless unless received by another. Terry is in the same sad situation. If they ___, both will be better off at no cost.

absolute, comparative

It has been reported that John Lennon was once asked whether Ringo Starr was the best drummer in the world, and he quipped, "He's not even the best drummer in the Beatles!" (Paul McCartney also drummed on some of the White Album.) Assuming that this story is true, and that Lennon was correct, explain, using economics, why it could still make sense to have Ringo on drums. John's quote suggests that Paul had an ___ advantage playing the drums, but Ringo had a ___ advantage playing the drums.

one clean kitchen, one batch of soup, one-fourth of a clean kitchen, four batches of soup, Mitchell, Kana, Mitchell, Kana

Nobel laureate Paul Samuelson said that comparative advantage is one of the few ideas in economics that is both "true and not obvious." Since it's not obvious, we should practice with it a bit. In each of the cases, determine the opportunity cost of each worker. Who has the absolute advantage at each task, and who has the comparative advantage? In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes, Mitchell can make miso soup; it takes Mitchell an hour to clean the kitchen. Kana's opportunity cost of a batch of soup is ___. Kana's opportunity cost of a clean kitchen is one batch of soup. Mitchell's opportunity cost of a batch of soup is ___. Mitchell's opportunity cost of a clean kitchen is ___. ___ has absolute advantage in making soup. ___ has absolute advantage in cleaning kitchens. ___ has comparative advantage in making soup. ___ has comparative advantage in cleaning kitchens.

e

Suppose that Ned can produce either potato chips or computer chips. If he only produces potato chips he can produce 16 bags in a day. If he only produces computer chips, he can produce 12 in a day. Drag the endpoints of the line to plot his production possibilities frontier (PPF) on the graph. (12 computer chips/16 potato chips) What is the opportunity cost of potato chip production (in terms of computer chips/bags of potato chips)? a) 2 b) 16 c) 12 d) 4/3 e) 3/4 f) 1/2

c

Suppose that in Mexico, it takes 4 labor hours to produce 1 shirt and 12 labor hours to produce 1 computer. Suppose that in the United States, it takes 4 labor hours to produce 1 shirt and 3 labor hours to produce 1 computer. If both countries have 60 labor hours available and if Mexico specializes completely in producing the product for which it has a comparative advantage, how many computers will Mexico produce? a) 7.5 b) 15 c) 0 d) 2.5

false

T/F: A nation will not have a comparative advantage in a product if it does not also have an absolute advantage in the production of that good.

true

T/F: It can be mutually beneficial for two nations to specialize in goods for which they have a comparative advantage and then trade with one another.

false

T/F: The process of specialization and trade has positive net benefits and is, therefore, beneficial to everyone.

duplication, specialization, is really only one brain being used

The federal education reform law known as No Child Left Behind requires every state to create standardized tests that measure whether students have mastered key subjects. The same test is given to all students in the same grade in the state. This encourages all schools within a state to cover the same material. According to the division of knowledge model, what are the costs of this approach? This is a costly strategy because it results in ___ rather than ___. If each of a million students knows the same set of facts, it is as if there ___.

c

The table shows the units of output a worker can produce per month in Germany and Korea for two different goods: televisions and personal computers. Use this table to answer the question. Worker in Germany: 40 TVs, 10 PCs Worker in Korea: 16 TVs, 8 PCs Which of the statements is true? a) Korea has a comparative advantage in the production of televisions, while Germany has a comparative advantage in the production of personal computers. b) Korea has a comparative advantage in the production of both goods. c) Germany has a comparative advantage in the production of televisions, while Korea has a comparative advantage in the production of personal computers. d) Germany has a comparative advantage in the production of both goods.

c

The work of dog walkers, closet organizers, and manicurists: a) gives other specialists the time they need to perfect their skills. b) exemplifies the frivolous nature of modern society. c) violates the principles of specialization and the division of knowledge. d) is equal in market value to the work of any other specialist.

a) neither goods b) both goods

These figures illustrate the production possibilities available to Kate and Sarah with eight hours of labor in their bakery. Answer the questions according to these figures. Kate: 4 Breads, 8 Cakes Sarah: 12 Breads, 9 Cakes Kate has an absolute advantage in: __ Sarah has an absolute advantage in: __

Drudgia, Differentia, one million, one trillion

Use the idea of the "division of knowledge" to answer the following questions. a. Which country has more knowledge: Utopia, where in the words of Karl Marx, each person knows just enough about hunting, fishing, and cattle raising to "hunt in the morning, fish in the afternoon, [and] rear cattle in the evening," or Drudgia, where one‑third of the population learns only about hunting, one‑third only about fishing, and one‑third only about cattle raising? There is more knowledge in ___. b. Which planet has more knowledge: Xeroxia, each of whose 1 million inhabitants knows the same list of 1 million facts, or Differentia, whose 1 million inhabitants each know a different set of 1 million facts? How many facts are known on Xeroxia? How many facts are known on Differentia? There is more knowledge on ___. On Xeroxia, there is a total of ___ facts known, whereas on Differentia, there is a total of ___ facts known.

1. a) Vincent 2. a) Vincent 3. 4.

Vincent and Jean are two cooks who work in a village. Each of them can either bake cakes or make pizzas. Every ingredient is readily available to them, and the only scarce resource is the cooks' time. Vincent can bake 10 cakes or make 5 pizzas in an hour. Jean can bake 12 cakes or make 8 pizzas in an hour. Please answer the four questions. 1. Which cook has the absolute advantage in baking cakes? a) Vincent b) Jean c) Neither 2. Which cook has the absolute advantage in making pizzas? a) Vincent b) Neither c) Jean 3. Which cook has the comparative advantage in baking cakes? a) Neither b) Jean c) Vincent 44. Which cook has the comparative advantage in making pizzas? a) Jean b) Vincent c) Neither

b

When trading with more developed countries, a) less developed countries do not have a comparative advantage in the production of any goods or services. b) less developed countries have a comparative advantage in the production of some goods or services. c) less developed countries have a comparative advantage in the production of all goods or services.

c

If Carl voluntarily sells a set of skis to Lathika for $200, it must be that: a) the skis must provide exactly $200 in value to Carl. b) the skis must provide exactly $200 in value to Lathika. c) Carl and Lathika value the skis differently. d) Carl and Lathika value the skis identically.

a

If Clarence uses AutoTrader (a magazine where people buy and sell cars) to sell a used minivan to Yvette, who benefits? a) Clarence, Yvette, and AutoTrader b) Clarence only c) AutoTrader only d) Clarence and AutoTrader

two newspaper ads, two sculptures, four ads, one-fourth of a sculpture. Kara, Sara, Kara, Sara

Nobel laureate Paul Samuelson said that comparative advantage is one of the few ideas in economics that is both "true and not obvious." Since it's not obvious, we should practice with it a bit. In each of the cases, determine the opportunity cost of each worker. Who has the absolute advantage at each task, and who has the comparative advantage? Kara can build two glass sculptures per day or she can design two full‑page newspaper advertisements per day. Sara can build one glass sculpture per day or design four full‑page newspaper ads per day. Kara's opportunity cost of two sculptures is ___. Kara's opportunity cost of two ads is ___. Sara's opportunity cost of a sculpture is ___. Sara's opportunity cost of four newspaper ads is ___. ___ has absolute advantage in sculpting. ___ has absolute advantage in designing ads. ___ has comparative advantage in sculpting. ___ has comparative advantage in designing ads.

b

Select the correct definition of the term "comparative advantage." a) the ability to produce more of a good or service than another over a specified time period b) the ability to produce a good or service at a lower opportunity cost than another c) a nation offering more favorable trade policy with its allies than with other countries d) the ability to produce a good or service at a higher opportunity cost than another e) the ability to produce less of a good or service than another over a specified time period

a) 4.25 t shirts b) 0.67 ice cream cups

Suppose that Paulie and Vince each can produce ice cream or t-shirts. The table shows the quantity of each good that Paulie and Vince each can produce in one hour, respectively, if they devote all of their time and effort to making the good. Chart: Pauli: 4 ice cream, 17 t-shirts Vince: 8 ice cream, 12 t-shirts What is Paulie's opportunity cost of producing one cup of ice cream (round to two decimal places)? __ What is Vince's opportunity cost of producing one t-shirt (round to two decimal places)? __ HINT: given up/gained

a

When two people have different preferences, trade: a) can be mutually beneficial. b) is never mutually beneficial. c) is always difficult to conduct. d) is impossible.

a. True b. True

a. American workers are commonly paid much more than Chinese workers. True or false: This is largely because American workers are typically more productive than Chinese workers. b. Julia Child, an American chef (and World War II spy) who reintroduced French cooking to Americans in the 1960s, was paid much more than most American chefs. True or false: This was largely because Julia Child was much more productive than most American chefs.

a) cake b) bread

The figures illustrate the production possibilities available to Kate and Sarah with eight hours of labor in their bakery. Answer the questions according to these figures. Kate: 4 Breads, 8 Cakes Sarah: 12 Breads, 9 Cakes Kate has a comparative advantage in: __ Sarah has a comparative advantage in: __

22,222 11,111 16,667 11,111 33,333 27,778

According to the Wall Street Journal (August 30, 2007, "In the Balance"), it takes about 30 hours to assemble a vehicle in the United States. Let's use that fact plus a few invented numbers to sum up the global division of labor in auto manufacturing. In international economics, "North" is shorthand for the high‑tech developed countries of East Asia, North America, and Western Europe, while "South" is shorthand for the rest of the world. Let's use that shorthand here. North: 30 hrs 1 high-quality car, 20 hrs 1 low-quality car South: 60 hrs 1 high-quality car, 30 hrs 1 low-quality car In a no‑trade world, let's assume that two‑thirds of the auto industry labor in each region is used to make high‑quality cars and one‑third is used to make low‑quality cars. Solve for how many of each kind of car will be produced in North and South, and add up to determine total global output of each type of car. (Why will both kinds of cars be made? Because the low‑quality cars will be less expensive.) Output of high-quality cars in the: North ___ South ___ Output of low-quality cars in the: North ___ South ___ Global output: High-Quality Cars ___ Low-Quality Cars ___

33,333 0 0 33,333 33,333 33,333

According to the Wall Street Journal (August 30, 2007, "In the Balance"), it takes about 30 hours to assemble a vehicle in the United States. Let's use that fact plus a few invented numbers to sum up the global division of labor in auto manufacturing. In international economics, "North" is shorthand for the high‑tech developed countries of East Asia, North America, and Western Europe, while "South" is shorthand for the rest of the world. Let's use that shorthand here. North: 30 hrs 1 high-quality car, 20 hrs 1 low-quality car South: 60 hrs 1 high-quality car, 30 hrs 1 low-quality car One million hours of labor are available for making cars in the North, and another 1 million hours of labor are available for making cars in the South. If each region completely specializes in the type of car in which it holds the comparative advantage, what will global output of high‑quality cars be? Of low‑quality cars? Is global output in each kind of car higher than before? (We'll solve a problem with the final step of trade in the Thinking and Problem Solving section.) Output of high-quality cars: North ___ South ___ Output of low-quality cars: North ___ South ___ Global output: High-Quality cars ___ Low-Quality Cars ___

a. North, North b. North, South

According to the Wall Street Journal (August 30, 2007, "In the Balance"), it takes about 30 hours to assemble a vehicle in the United States. Let's use that fact plus a few invented numbers to sum up the global division of labor in auto manufacturing. In international economics, "North" is shorthand for the high‑tech developed countries of East Asia, North America, and Western Europe, while "South" is shorthand for the rest of the world. Let's use that shorthand here. a. Consider the productivity table. Which region has an absolute advantage at making high‑quality cars? And low‑quality cars? North: 30 Hours for High-Quality, 20 Hours for Low-Quality South: 60 Hours for High-Quality, 30 Hours for Low-Quality The North has an absolute advantage in high‑quality cars. The North has an absolute advantage in low‑quality cars. b. Using the information in the productivity table, estimate the opportunity cost of making high‑ or low‑quality cars in the North and in the South. Which region has a comparative advantage, i.e., lowest opportunity cost, for manufacturing high‑quality cars? For low‑quality cars? The ___ has a comparative advantage in high‑quality cars. The ___ has a comparative advantage in low‑quality cars.

Hours: 96 Christine will write music for 0 songs. Paul will write music for 8 songs. Christine will write lyrics for 12 songs. Paul will write lyrics for 0 songs.

Christine and Paul are deciding how to split their time between writing music and lyrics for their new album. Their PPFs for 72 h of work are shown. Christine and Paul have to write music for 8 songs and lyrics for 12 songs (4 songs already have music). When they are done, they can go to a private island and relax from all their hard work. It is possible that they will use more than 72 h. Once they start writing lyrics and music, assuming their hired help packs for them and their plane is waiting outside their door, in how many hours can they board the plane to their relaxing island getaway? Hours: __ Christine will write music for __ songs. Paul will write music for __ songs. Christine will write lyrics for __ songs. Paul will write lyrics for __ songs.

c

Farmers in New Zealand wake at 5 AM to work hard in their fields growing kiwi because: a) they have an absolute advantage in the production of kiwi. b) if they did not, you could easily grow your own kiwi. c) the value to them of their time and other resources is less than the value of the kiwi-to-kiwi consumers. d) they know how much consumers around the world enjoy kiwi.

one more shirt, one-half more, the U.S., minimum, one shirt, maximum, six shirts

In the computers and shirts example from the chapter, the United States traded one computer to Mexico in exchange for three shirts. This is not just an arbitrary ratio of shirts to computers, however. Let's explore the terms of trade a little bit more. Mexico: Opp Cost for 1 PC - 6 Shirts, Opp Cost for 1 Shirt - 1/6th of a PC U.S.: Opp Cost for 1 PC - 1 shirt, Opp Cost for 1 Shirt - 1 PC a. Why is trading away a computer for three shirts a good trade for the United States? Why is it also a good deal for Mexico? If the United States 'traded' one computer domestically by shifting resources into shirt production, there would be ___ available as a result. If Mexico 'traded' three shirts domestically by reallocating resources, it would get ___ computers as a result. b. What if, instead, the agreed‑upon terms of trade were one computer for eight shirts. Would this trade still benefit both the United States and Mexico? It would benefit ___. c. What is the maximum (and minimum) number of shirts that a computer can trade for if the United States and Mexico are both to benefit from the trade? For the United States, a ___ of ___. For Mexico, a ___ of ___.

a

In the real world, what will happen to workers' wages in the sector with decreased demand as a result of trade? a) Their wages will fall. b) Their wages will not change. c) Their wages fall and then rise. d) Their wages will rise.

a comparative, comparative, manufacturing, comparative, some other type of production, opportunity cost, nonmanufacturing, an absolute, comparative, absolute

Many people talk about manufacturing jobs leaving the United States and going to other places, like China. Why isn't it possible for all jobs to leave the United States and go overseas (as some people fear)? This is not possible because every nation has to have a ___ advantage in something. The greater China's ___ advantage in ___, for example, the greater the United States' ___ advantage must be in ___. The more that firms want to locate manufacturing processes in countries like China, the more that those countries would give up. That is, the higher the ___ if they pursued other ___ activities. Even if it were cheaper to produce everything in China—thus giving China something like an ___ advantage in all production — trade is based on ___ advantage, not ___ advantage.

100 physics problems, 12 poems, 0.5 physics problems, one poem. Omar, Omar, Riker, Omar

Nobel laureate Paul Samuelson said that comparative advantage is one of the few ideas in economics that is both "true and not obvious." Since it's not obvious, we should practice with it a bit. In each of the cases, determine the opportunity cost of each worker. Who has the absolute advantage at each task, and who has the comparative advantage? Omar can write 12 excellent poems per day or solve 100 difficult physics problems per day. Riker can write one excellent poem per day or solve 0.5 difficult physics problems per day. Omar's opportunity cost of a dozen poems is ___. Omar's opportunity cost of 100 physics problems is ___. Riker's opportunity cost of a poem is ___. Riker's opportunity cost of 0.5 physics problems is ___. ___ has absolute advantage in writing poems. ___ has absolute advantage in solving physics problems. ___ has comparative advantage in writing poems. ___ has comparative advantage in solving physics problems.

two drywalled rooms, 20 cookies, 3 drywalled rooms, 100 cookies. Sienna, Sienna, Sienna, Ethan

Nobel laureate Paul Samuelson said that comparative advantage is one of the few ideas in economics that is both "true and not obvious." Since it's not obvious, we should practice with it a bit. In each of the cases, determine the opportunity cost of each worker. Who has the absolute advantage at each task, and who has the comparative advantage? In one hour, Ethan can bake 20 cookies or hang the drywall for two rooms. In one hour, Sienna can bake 100 cookies or hang the drywall for three rooms. Ethan's opportunity cost of a batch of 20 cookies is ___. Ethan's opportunity cost of drywalling two rooms is ___. Sienna's opportunity cost of a batch of 100 cookies is ___. Sienna's opportunity cost of drywalling three rooms is ___. ___ has absolute advantage in baking cookies. ___ has absolute advantage in drywalling. ___ has comparative advantage in baking cookies. ___ has comparative advantage in drywalling.

a. 4.25 b. 0.40 c. Paulie has a comparative advantage in t-shirts and Vinny has a comparative advantage in ice cream.

Suppose that Paulie and Vinny each can produce ice cream or t-shirts. The table shows the quantity of each good that Paulie and Vinny each can produce in 1 hour, respectively, if they devote all of their time and effort into making the good. Round all answers to two decimal places. Pauli: 4 Ice cream, 17 t-shirts Vinny: 10 ice cream, 15 t-shirts a. What is Paulie's opportunity cost of producing a cup of ice cream? b. What is Vinny's opportunity cost of producing a t-shirt? c. Pauli has a comparative advantage in __ and Vinny has a comparative advantage in __.

b

Suppose that in Mexico, it takes 4 labor hours to produce 1 shirt and 10 labor hours to produce 1 computer. Suppose that in the United States, it takes 3 labor hours to produce 1 shirt and x labor hours to produce 1 computer. Does the value of x affect the United States' absolute advantage in the production of shirts? a) Only values of x greater than 5 will do this. b) No. At any value of x, the United States will have an absolute advantage in shirts. c) Only values of x less than 3 will do this. d) If x is 4, the United States will not have an absolute advantage in shirts.

b) 67.5 (Explanation of answer) Given a trading ratio of 7.5 shirts for 7.5 computers, with trade, the United States produces 0 shirts and 20 computers and consumers 7.5 shirts and 12.5 computers. To make 7.5 shirts and 12.5 computers on its own, the United States would have needed 7.5×4+12.5×3 = 67.5 hours. This means that people in the United States are consuming 12.5% more than they can produce.

Suppose that in Mexico, it takes 4 labor hours to produce 1 shirt and 12 labor hours to produce 1 computer. Suppose that in the United States, it takes 4 labor hours to produce 1 shirt and 3 labor hours to produce 1 computer. If both countries have 60 labor hours available, completely specialize according to comparative advantage, and trade 7.5 shirts for 7.5 computers, how many labor hours would it have taken the United States to produce on its own the goods it consumes as a result of trade? a) 82.5 b) 67.5 c) 60 d) 90

b

Suppose that the 100 people in society J all know the same 10 facts, while the 100 people in society K specialize, with each person knowing 8 unique facts as well as 2 facts also known by the other 99 people in the society. Which of the following is true? a) Each person in society J knows more important facts than each person in society K, but society K has more knowledge than society J in the aggregate. b) Each person in both societies knows the same number of facts, but society K has more knowledge than society J in the aggregate. c) Each person in society J knows fewer facts than each person in society K, but society J has more knowledge than society K in the aggregate. d) Each person in society J knows more facts than each person in society K, but society K has more knowledge than society J in the aggregate.

2, 200, United States, cannot be determined, 12.5

Suppose the following table shows the number of labor hours needed to produce airplanes and automobiles in the United States and South Korea, but one of the numbers is unknown. South Korea: 2000 hrs produce 1 airplane, x hrs to produce 1 auto United States: 800 hrs produce 1 airplane, 5 hrs to produce 1 auto a. Without knowing the number of labor hours required to produce an auto in South Korea, you can't figure out which country has the comparative advantage in which good. Can you give an example of a number for the empty cell of the table that would give the United States the comparative advantage in the production of airplanes? What about South Korea? Round all answers to no more than one decimal place. Enter a number that would give comparative advantage to the U.S.: ___ hours South Korea: ___ hours b. Who has the absolute advantage in the production of airplanes? What about autos? Absolute advantage in airplanes: ___ Absolute advantage in autos: ___ c. What exact number would you have to place in the empty cell of the table for it to be impossible that trade between the United States and South Korea could benefit both nations? ___