Make sure you’ve completed the homework introduced in the Comparative Advantage video before you watch this video, as we’ll be going over the answer. We take a look
Make sure you’ve completed the homework introduced in the Comparative Advantage video before you watch this video, as we’ll be going over the answer. We take a look at our example which compares shirt and computer production and consumption in Mexico and the United States. At the end of this video, you’ll have a better understanding of why it makes sense for countries to engage in trade.
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With regard to the practice question:
"There are 1 million hours of labor available for making cars in the North, and another 1 million hours of labor available for making cars in the South. 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. What will be the global output of low-quality cars?"
North produces 16,666.67 low quality cars (333,333.33 hours / 20 hours per low quality car)
South produces 11,111.11 low quality cars (333,333.33 hours / 30 hours per low quality car)
As neither 66% of a car nor 11% of a car is 'a car', I believe the correct answer to the question should be 27,777 cars (16,666 whole cars produced in North, and another 11,111 produced in South).
This minor quibble about rounding aside, I'm very much enjoying your my way though the videos. Thank you very much for taking the time to make them.
A very informative video on Comparative Advantage Homework which is the ability of an individual or group to carry out a particular economic activity more efficiently than another activity. This will help me to complete my economic assignment writing tasks as a part of my profession at Elite Assignment help servicewhere students are seeking for the economic related assignment writing help from the experts.