can anyone answer and if possible explain why choose the answer. e.g. 1) D becau
ID: 1110860 • Letter: C
Question
can anyone answer and if possible explain why choose the answer.
e.g. 1) D because.........
l able 33.4 Chile Germany Beer Wine (cases) (cases 75 60 45 Wine Beer cases 30 24 18 12 cases 30 45 60 12 24 36 48 6 26. Refer to Table 33.4. Chile has A) a comparative advantage in wine production B) an absolute advantage and a comparative advantage in beer production. C) an absolute advantage and a comparative advantage in wine production. D) neither a comparative advantage in wine production nor in beer production. 27. Refer to Table 33.4. Germany has A) a comparative advantage in beer production. B) an absolute advantage in wine production C) an absolute advantage in beer production. D) all of the above. 28. Refer to Table 33.4. Chile should specialize in and exportand Germany should specialize in and export A) beer; beer B) wine; wine C) wine; beer D) beer; wine 29. Refer to Table 33.4. Before specialization, Germany produces 45 cases of beer and 30 cases of wine, and Chile produces 18 cases of beer and 24 cases of wine. After specialization, the increase in beer production is A) 0 cases of beer. B) 2 cases of beer C) 8 cases of beer. D) 12 cases of beer. 30. Refer to Table 33.4. Before specialization, Germany produces 45 cases of beer and 30 cases of wine, and Chile produces 18 cases of beer and 24 cases of wine. After specialization, the increase in wine production is A) 2 cases of wine. B) 4 cases of wine. C) 6 cases of wine D) 10 cases of wine. 31. Refer to Table 33.4, For both countries to benefit from trade, the terms of trade must be case(s) of beer to case(s) of wine. between A) 1:1/2 and 1:4 B) 1:1 and 1:2 C) 1:1 and 1:1/2 D) 2:3 and 2:1Explanation / Answer
26. Opportunity cost of producing wine :
Chile - 30-24 / 12-0 = 6/12 = 0.5 beers
Germany - 75-60 / 15-0 = 15/15 = 1 beer
As Chile has lesser opportunity cost of producing wine, chile has comparative advantage in production of wine.
Similary,
Opportunity cost of producing beer :
Chile - 60-48 / 6-0 = 12/6 = 2 wine
Germany - 75-60 / 15-0 = 15/15 = 1 wine
As Germany has lesser opportunity cost of producing beer, chile has no comparative advantage in production of beer.
Option A is correct.
27)
Opportunity cost of producing beer :
Chile - 60-48 / 6-0 = 12/6 = 2 wine
Germany - 75-60 / 15-0 = 15/15 = 1 wine
As Germany has lesser opportunity cost of producing beer, Germany has comparative advantage in production of beer.
Option A is correct.
28) Countries should export good in which it has comparative advantage. As germany has comparative advantage in beer and Chile has in wine. Thus chile should export wine and germany should export beer.
option C is correct.
29) If both countries produces only those good in which they specualize then chile will produce only wine that is 60 cases of wine and Germany will produce only beer that is 75 cases of beer.
Earlier total cases of wine = 30+24 = 54 cases. Now it is 60 hence increased by 60-54 = 6 cases of wiine
Earlier total cases of beer = 45+18 = 63. Now it is 75. Increased = 75-63 = 12 cases.
Option D is correct.
30) Earlier total cases of wine = 30+24 = 54 cases. Now it is 60 hence increased by 60-54 = 6 cases of wiine
option C is correct.
31) The term of trade should be between the opportuntity costs of two countries.
Option C is correct.
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