Assume that the world economy consists of two countries: Russia and Republic of Belarus. Each country can produce tomatoes and potatoes. Russia can produce 1000 tons of tomatoes or 3000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 3 × tomatoes = 3000. Republic of Belarus can produce 500 tons of tomatoes or 1000 tons of potatoes or any linear combination of tomatoes and potatoes that satisfies potatoes + 2 × tomatoes = 1000. Countries can freely trade with each other.
-If the total world production of potatoes is 2000 tons,how much tomatoes will be produced in Russia?
A) 1000 tons
B) 500 tons
C) 666.67 tons
D) 333.33 tons

Question

Quizplus · Accepted Answer

Given the total world production of potatoes is 2000 tons, and considering the production possibilities of both countries, Russia will focus on producing potatoes (where it has a comparative advantage) and Belarus will produce tomatoes (where it has a comparative advantage). Since Belarus can produce up to 1000 tons of potatoes, the remaining 1000 tons of potatoes must be produced by Russia. Using Russia's production possibility equation (potatoes + 3 × tomatoes = 3000), substituting 1000 for potatoes gives 1000 + 3 × tomatoes = 3000, solving for tomatoes gives tomatoes = 666.67. However, since Russia is producing 1000 tons of potatoes, it actually has less capacity for tomatoes, indicating a mistake in the initial allocation assumption. Correcting this, for Russia to produce 1000 tons of potatoes, the equation should be directly solved for the amount of tomatoes it can produce alongside those potatoes, not assuming it produces all remaining potatoes after Belarus. Given the correct interpretation of Russia's production capabilities and the total potato production, the calculation should directly reflect Russia's allocation between potatoes and tomatoes based on its production possibility frontier.

Assume That the World Economy Consists of Two Countries: Russia