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A factory produced 96,493 kg of rubber in 1981 and 91,172 kg in 1988.

1. In which year was more rubber produced?
2. How many more kilograms of rubber were produced in that year?

Answer :

In 1981, the factory produced 5,321 more kilograms of rubber than in 1988. Malaysia has the absolute advantage in rubber production, while Japan has the comparative advantage in radio production based on opportunity costs.

More rubber was produced in the year 1981 since the factory produced 96,493 kg, compared to 91,172 kg in the year 1988. To determine how many more kilograms were produced in 1981, you subtract the amount of rubber produced in 1988 from the amount produced in 1981:

96,493 kg (1981 production) - 91,172 kg (1988 production) = 5,321 kg

So, 5,321 more kilograms of rubber were produced in 1981.

Concerning the information about production capabilities in Japan and Malaysia, Malaysia has the absolute advantage in the production of rubber since one worker can produce 10 tons there, compared to 5 tons in Japan. When calculating the opportunity cost of producing 80 additional radios, we find that in Japan, one worker must forego making 5 tons of rubber to make 80 radios, which makes the opportunity cost 5 tons/80 radios or 0.0625 tons per radio. In Malaysia, the opportunity cost is 10 tons of rubber for 40 radios, equating to 0.25 tons per radio. Therefore, Japan has a comparative advantage in the production of radios.

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