Micro: MyEconLab question

[Hutchoo]

This question is REALLLLLLLY pissing me off now. I don't know how they got the answer for C.

Hopefully one of you guys can explain it to me.

[Kuchiki]

As you found in part b., Chile has a comparative advantage in the production of hats, so we get Chile to produce only hats. With 1,000 hours of labour available, Chile can produce 10,000 hats.

As Argentina has a comparative advantage in the production of beer, we get Argentina to produce only beer. With 1,000 hours of labour, Argentina can produce 2,000 barrels of beer.

Now, Chile and Argentina trade with each other. The table in part c. shows that Argentina has received 800 hats (from Chile), and so Chile keeps the remaining 9,200. And since Chile has received 800 barrels of beer (from Argentina), then Argentina must keep the remaining 1,200 barrels.


Hope that makes sense.

[Hutchoo]

As you found in part b., Chile has a comparative advantage in the production of hats, so we get Chile to produce only hats. With 1,000 hours of labour available, Chile can produce 10,000 hats.

As Argentina has a comparative advantage in the production of beer, we get Argentina to produce only beer. With 1,000 hours of labour, Argentina can produce 2,000 barrels of beer.

Now, Chile and Argentina trade with each other. The table in part c. shows that Argentina has received 800 hats (from Chile), and so Chile keeps the remaining 9,200. And since Chile has received 800 barrels of beer (from Argentina), then Argentina must keep the remaining 1,200 barrels.


Hope that makes sense.

Thank you man! It's always the trivial stupid/easy stuff that fucks me off :@

Thanks.

[Hutchoo]

PART A:





PART B:


I keep getting these questions wrong.. and I don't know why :/
Any help is appreciated.

Note: the answers given are all correct, I don't know how to do part b), calculating the additional shirts/boots after trade

Ty

[Kuchiki]

The United States has a comparative advantage in producing shirts. If they only produce shirts and no boots, then they can produce 36 shirts (as shown on the PPF). The United States keeps half of this, while the other half is traded to Canada, meaning that both countries get 18 shirts. Initially, the United States was consuming 18 shirts, so they will have 0 additional shirts after the trade. Canada was initially consuming 4 shirts, so they will have 14 additional shirts after the trade.

Canada has a comparative advantage in producing boots. By only producing boots, they can produce 24 boots. Again, half is traded to the United States and half is kept by Canada, so both countries will have 12 boots. The United States was initially consuming 2 boots, so they will have 10 additional boots after the trade. Canada was initially consuming 8 boots, so they will have 4 additional boots after the trade.