Table 2-10 -Refer to Table 2-10.This Table Shows the Number of Labor

question 55

Essay

Table 2-10

-Refer to Table 2-10.This table shows the number of labor hours required to produce a wristwatch and a bushel of rice in Japan and Thailand.
a.Which country has an absolute advantage in the production of wristwatches?
b.Which country has an absolute advantage in the production of rice?
c.What is Japan's opportunity cost of producing one wristwatch?
d.What is Thailand's opportunity cost of producing one wristwatch?
e.What is Japan's opportunity cost of producing one bushel of rice?
f.What is Thailand's opportunity cost of producing one bushel of rice?
g.If each country specializes in the production of the product in which it has a comparative advantage,who should produce wristwatches?
h.If each country specializes in the production of the product in which it has a comparative advantage,who should produce rice?

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Definitions:

Flexible Exchange-rate System

An exchange rate regime in which a currency's value is allowed to fluctuate according to the foreign exchange market.

European Euro

The official currency used in 19 of the 27 European Union countries, known as the Eurozone.

Rate of Exchange

The price of one country's currency expressed in terms of another country's currency, facilitating international trade and investment.

Supply and Demand Curves

Graphical representations that show the relationship between the prices of goods and services and their quantities supplied and demanded in the market.