The following table looks at the maximum amount of Televisions and Machines that China and Japan...

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Economics

The following table looks at the maximum amount of Televisionsand Machines that China and Japan can produce. Assume that thetrade-off between Televisions and Machine production in China andJapan is always the same.
Maximum Machine Production
Maximum Television Production
China
10 million machines
60 million televisions
Japan
5 million machines
15 million televisions
Draw a production possibilities curve for China and Japan.(Assume that China and Japan produce nothing else except machinesand televisions.
What is the opportunity cost of producing one more machine inChina? In Japan?
Identify which country has the comparative advantage in machineproduction and which country has the comparative advantage intelevision production.
Show how China would benefit from trading with Japan.
Show how Japan would benefit from trading with China.

Answer & Explanation Solved by verified expert

4.0 Ratings (598 Votes)

a The production possibility curve isb The open door cost of deliveringone machine in Japan 153 5 TVsThe open door cost of deliveringmachine in China 6010 6 TVsc As the open door cost of deliveringmachines is less for Japan Japan See Answer

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	Maximum Machine Production	Maximum Television Production
China	10 million machines	60 million televisions
Japan	5 million machines	15 million televisions