2 Two countries, Aquarium and Lillbanum, trade with each other. We call the products wild boar (designated V) and marble (M). Wild boar production is relatively land-intensive; the production of marble is relatively labor intensive. Aquarium has a relatively good workforce. Illustrate the production possibilities of the aquarium; place the boar on the vertical axis and the marble on the horizontal axis. Use your figure to illustrate: i) production and consumption in the aquarium under autarky; ii) production and consumption in the aquarium during trade and iii) which commodity the Aquarium exports and which commodity the Aquarium imports (mark the size of exports and imports in the figure).

2 Two countries, Aquarium and Lillbanum, trade with each other. We call the products wild boar (designated V) and marble (M). Wild boar production is relatively land-intensive; the production of marble is relatively labor intensive. Aquarium has a relatively good workforce. Illustrate the production possibilities of the aquarium; place the boar on the vertical axis and the marble on the horizontal axis. Use your figure to illustrate: i) production and consumption in the aquarium under autarky; ii) production and consumption in the aquarium during trade and iii) which commodity the Aquarium exports and which commodity the Aquarium imports (mark the size of exports and imports in the figure).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose there exist two imaginary countries, Everglades and Denali. Their labor forces are each capable of supplying four million hours per day that can be used to produce shorts, almonds, or some combination of the two. The following table shows the amount of shorts or almonds that can be produced by one hour of labor. Country Shorts Almonds (Pairs per hour of labor) (Pounds per hour of labor) Everglades 4 16 Denali 6 12 Suppose that initially Denali uses 1 million hours of labor per day to produce shorts and 3 million hours per day to produce almonds, while Everglades uses 3 million hours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Everglades produces 12 million pairs of shorts and 16 million pounds of almonds, and Denali produces 6 million pairs of shorts and 36 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two…
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The accompanying Production Possibilities Frontiers (PPF) represent hypothetical levels of production for Honduras and Brazil. Assume the two countries are initially producing and consuming in autarky at point A on each of their PPFs. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. a. What will each country produce? a. Honduras will produce both goods. b. Brazil will produce both goods. c. Honduras will produce bananas and Brazil steel. d. Honduras will produce steel and Brazil bananas. b. Suppose each country specializes in the production of the good for which it has a comparative advantage, and they trade at a price of of 4,000 tons of steel for 6,000 tons of bananas. Place the points labeled "Post Trade Consumption" to show the amounts of bananas and steel each country will have to consume after they trade. (look at image)
Suppose there exist two imaginary countries, Everglades and Denali. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor. Country Almonds Shorts (Pounds per hour of labor) (Pairs per hour of labor) Everglades 5 20 Denali 8 16 Suppose that initially Denali uses 1 million hours of labor per week to produce almonds and 3 million hours per week to produce shorts, while Everglades uses 3 million hours of labor per week to produce almonds and 1 million hours per week to produce shorts. As a result, Everglades produces 15 million pounds of almonds and 20 million pairs of shorts, and Denali produces 8 million pounds of almonds and 48 million pairs of shorts. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two…
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