Question

suppose that initially denali uses 1 million hours of labor per week to produce shorts and 3 million hours per week to produce almonds, while congaree uses 3 million hours of labor per week to produce shorts and 1 million hours per week to produce almonds. as a result, congaree produces 15 million pairs of shorts and 20 million pounds of almonds, and denali produces 8 million pairs of shorts and 48 million pounds of almonds. assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country consumes the amount of shorts and almonds it produces.

Answer 1

The scenario describes a situation where France and Tunisia can maximize production by focusing on their area of comparative advantage. The Production Possibilities Frontier (PPF) for each country can be drawn to show these trade-offs and the impact of specializing based on comparative advantage.

Step-by-step explanation:

Considering a scenario where two countries, France and Tunisia, are producing two goods, green beans and tomatoes, we can analyze the situation using the concept of the Production Possibilities Frontier (PPF). Both countries should focus on producing the good for which they have a comparative advantage. For France, it takes two hours to harvest green beans and two hours to harvest a tomato. In contrast, Tunisia requires only one hour to harvest tomatoes but four hours to harvest green beans.

Each country has one worker who can work 40 hours per week. For France, the PPF would show a maximum production possibility of 20 units of either good (since each takes two hours) if all 40 hours are dedicated to one good. For Tunisia, the maximum for tomatoes would be 40 units if all time is spent on tomatoes, and 10 units for green beans if all 40 hours are devoted to green beans.

Drawing the PPF for each country would involve plotting the maximum production possibilities on a graph with one good on each axis. For example, if France allocates all 40 hours to harvesting green beans, they produce 20 units (40 hours / 2 hours per unit = 20 units), but zero tomatoes. If they split their time equally, they would produce 10 units of each. Tunisia's PPF would show a similar trade-off with more extreme differences due to their comparative advantage in tomato harvesting.