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Individual Assignment 01
Question 1. (3 points)
Question 2. (3 points).
Case 1: Output approach
Two commodities and two countries
Given the resources, Singapore and Malaysia can produce the following products –
television sets and cars (see Table 01)
Countries TV sets Cars (units)
Singapore 100 50
Malaysia 60 40
Table 01
+ Which country has the absolute advantage in the production of both TV sets and
Cars over the other?
+ Which country has the comparative advantage either in the production of TV sets
or in the production of Cars over the other?
Case 2: Input approach
Two commodities and two countries
Give the resources, America and England can produce one unit for both Steel and
Coal in terms of number of working hours shown as follows:
Countries One unit of Steel One unit of Coal
required required
America 80 man-hours 90 man-hours
England 120 man-hours 100 man-hours
Table 02
+ Which country should specialize in the production of Steel?
+ Which country should specialize in the production of Coal?
Question 3 (2 points). The workers in a factory currently earn $120 for a 39 – hour week.
The management offers them a choice between either a straight 10% wage increase or an
increase in the weekly wage to $125 coupled with a reduction in hours from 39 to 37 hours.
What is the opportunity cost to each worker of opting for the 37 – hour week?
Question 4 (2 points). You can allocate your time for the next four years between studying
and working at a car wash. Each semester you spend studying you can earn 15 credit hours and
each semester you work at the car wash you wash 800 cars. If you have 8 semesters to allocate,
label each of the following on a graph.
a. Your production possibilities curve
b. A point that is unattainable
c. A point that is efficient
d. Plot and label a point on your graph that represents a decision to take a semester off from
both studying and working.