Math Problem Statement
For the United States, the opportunity cost of a car is 0.4 cars per ton of grain.the opportunity cost of grain is 2.5 tons of grain per car. For Japan, the opportunity cost of a car is 2.5 tons of grain per car. Japan's opportunity cost is 0.4 cars per ton of grain. These opportunity costs can help determine the comparative advantage between the two countries.
how much would each give up to eachother in trade
Solution
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Math Problem Analysis
Mathematical Concepts
Comparative Advantage
Opportunity Cost
Trade Ratios
Formulas
Opportunity cost of a good = Quantity of another good given up / Quantity of the good produced
Trade range: Between opportunity costs of the goods traded
Theorems
Theory of Comparative Advantage
Suitable Grade Level
College level (Economics/International Trade)
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