Capabilities of Workers

Writing Assessment

The following table shows the productive capabilities of workers in Izodia and Oz. Use the table to answer the questions that follow. Your work for this problem must be submitted to receive a grade.

Izodia Oz

Product Workers Output Workers Output

televisions 50 75 50 100

computers 50 150 50 25

a) Which country has an absolute advantage in producing televisions? Computers?

b) Which country has a comparative advantage in producing televisions? Computers?

A. From the graph above it looks like the country with the absolute advantage in televisions will go to Oz they are producing 25 more televisions over Izodia with the same amount of workers. The company with the absolute advantage in producing computers will go to Izodia they have produced 125 more than the same amount of workers. This is defined as the ability to produce more output from a given input of resources than other producers can.

B. This is defined as the ability to produce a good or service at a lower opportunity cost than other producers. So if we look at the televisions it looks like it will be Oz again they are producing 50X2 or 100 televisions as Izodia is only putting out at a rate of 50x1.5 which in the long run or as you can see in the chart will produce 25 less. As for the computers let us look at Izodia they are producing at a rate of 50x3 and that will allow them to produce 150 at this rate. In the case of Oz they are producing at a rate of 50x.5 which is much lower than the other company.