Question

imagine that there are two countries, home and far far away, and that residents of each own only one asset, domestic land yielding an annual harvest of mangoes. assume that the yield on the land is uncertain. half the time, home's land yields a harvest of 5,000 tons of mangoes at the same time as far far away's land yields a harvest of 2,500 tons. the other half of the time the outcomes are reversed. the average for each country mango harvest is a. 2500. b. 2750. c. 3500. d. 3750. e. 3000.

Answer 1

France has absolute advantage in green beans, while Tunisia has absolute advantage in tomatoes.

Step-by-step explanation:

In this scenario, France and Tunisia have different time requirements to harvest green beans and tomatoes. In France, it takes 2 hours to harvest green beans and 2 hours to harvest a tomato, while in Tunisia, it takes 4 hours to harvest green beans and 1 hour to harvest a tomato.

Assuming there are two workers in each country, we can draw a production possibilities frontier (PPF) for each country to understand their maximum production capabilities.

For France, with two workers working 40 hours a week, the maximum number of green beans produced can be calculated as 40 hours/week * 2 workers * 1/2 hours/bean = 40 beans. Similarly, the maximum number of tomatoes produced can be calculated as 40 hours/week * 2 workers * 1/2 hours/tomato = 40 tomatoes.

A PPF for France would show these maximum combinations of green beans and tomatoes within the limits of available resources and time.

For Tunisia, using the same calculations, the PPF would show a maximum of 80 green beans and 160 tomatoes.

In terms of absolute advantage, France has the absolute advantage in green beans as it can produce more green beans (40 beans) than Tunisia (80 beans). On the other hand, Tunisia has the absolute advantage in tomatoes as it can produce more tomatoes (160 tomatoes) than France (40 tomatoes).