2. In a one-factor economy, you have the following information: Home has 1,200units of labor available. It can produce two goods, apples and bananas. Theunit labor requirement in apple production is 3, while in banana production it is2. Foreign, has a labor force of 800. Foreign's unit labor requirement in appleproduction is 5, while in banana production it is 1.a. Graph Home's & Foreign production possibility frontier. Specify the maximumquantity that can be produced from both goods. Find the absolute value of theslope.b. Compare the opportunity cost of apples in Home and in Foreign.c. If apples are sold at $9/unit and bananas are sold at $5/unit. Find the wages paidin Home to produce apples and bananas.d. Identify the good that Home should specialize in and why.

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Answered: 2. In a one-factor economy, you have…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 10RQ: Give the three reasons that explain why the division of labor increases an economys level of...

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Home has 1200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in bananas production it is 2. There is now also another country, Foreign, with a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in bananas production it is 1. a) When all the labor in Foreign country only produce apples, how many units of apples can be produce? b) When all the labor in Foreign country only produce bananas, how many units of bananas can be produce? c) What is the opportunity cost of apples in terms of bananas in Foreign country?
6). Home is as described in problem 5. There is now also another country, Foreign, with a labor force of 800. Foreign’s unit labor requirement in apple production is 5, while in bananas production it is 1. a) When all the labor in Foreign country only produce apples, how many units of apples can be produce? b) When all the labor in Foreign country only produce bananas, how many units of bananas can be produce?
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Potatoes (tons) 8 100 200 300 400 500 Sausages (tons) 400 350 300 a. If the two countries decided to combine their resources, what is the maximum amount of potatoes the two countries could produce? O 250 tons O 500 tons O 1,000 tons 750 tons 250 b. If the two countries decided to combine their resources, what is the maximum amount of sausages the two countries could produce? 200 Sausages (tons) 158 128 98 150 100 250 tons 350 tons c. If the two countries specialize and produce the good in which they have a comparative advantage. what is the maximum combination of potatoes and sausages they can produce together? 50 60 30 8 150 tons 750 tons O 750 tons of potatoes and 350 tons of sausages 500 tons of potatoes and 200 tons of sausages 650 tons of potatoes and 450 tons of sausages 250 tons of potatoes and 150 tons of sausages d. Using the three combined amounts of production, graph the combined production possibilities frontier for Ireland and Scotland. Instructions: Use the tool provided…
Table 3-3 Labour hours needed to make one unit: Quilts Helen Carolyn 40 80 Dresses 10 16 Refer to Table 3-3. How could Helen and Carolyn both benefit? Amount produced in 160 hours: Quilts Dresses 4 2 O a. by Helen specializing in both goods and Carolyn specializing in neither good O b. by Helen specializing in neither good and Carolyn specializing in both goods O c. by Helen specializing in quilts and Carolyn specializing in dresses O d. by Helen specializing in dresses and Carolyn specializing in quilts 16 10
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1. The countries France and Italy produce Perfumes and Leather Coats using only labor as an input. AvailableLabor for France and Italy is 3000 and 1000 respectively. Unit of labor per Leather Coat in France is 6 units and inItaly are 2 units. France needs 2 units of labors to produce 1 bottle of Perfume and Italy needs 4 unit of labor. a) Draw the Production Possibility Curve by using relevant information. b) Which country has the comparative advantage in producing Perfume?
The following table shows the production possibilities for the country of Erewhon: A CDEF Wine 10 18 24 28 30 Cheese 40 28 18 10 4 0 What is the total cost of producing the first 10 units of wine? O a. 24 units of cheese O b. 28 units of cheese O c. 12 units of cheese O d. 6 units of cheese B.
Consider two countries, Home and Foreign and two goods appples and bananas. In the Home country the unit labour requiremrents for apples and bananas are repectively 3 and 2. In the Foreign country the unit labour requirements for apples and bananas are 5 and 1 respectively. The Home country has a labour force of 1200 and the Foreign country has a labour force of 800. Graph the Production Possiblity Frontiers for each of the two countries. What are the prices of apples in terms of bananas in both countries in the absence of trade? Why? Construct the world relative supply function. Suppose that the world relative demand takes the following form: demand for ap- ples/demand for bananas = banana price/apple price. Draw the world relative de- mand curve superimposed on the world relative supply curve. What is the equilibrium relative price of apples under free trade? Describe the pattern of trade. Show that each of the two countries gain from trade. Suppose that instead of 1200…
Table 3-3 Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Aruba Iceland Labor Hours Needed to Make 1 Radio 5 4 Cooler 2 1 Refer to Table 3-3. Assume that Aruba and Iceland each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is 60 coolers and 80 radios. 18 coolers and 40 radios. 18 coolers and 60 radios. 60 coolers and 18 radios.
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