5. The price of trade Suppose that Hungary and Luxembourg both produce boo and shoes. Hungary's opportunity cost of producing a pair shoes is 4 pairs of boots while Luxembourg's opportunity cost of producing a pair of shoes is 12 pairs of boots. By comparing the opportunity cost of producing shoes in t two countries, you can tell that has a comparative has a A advantage in the production of shoes and comparative advantage in the production of boots. Suppose that Hungary and Luxembourg consider trading shoes and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each pair of shoes it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it receives more than of shoes for each pair of boots it exports to Hungary. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of boots) would allow both Luxembourg and Hungary to gain from trade? Check all that apply. 7 pairs of boots per pair of shoes 1 pair of boots per pair of shoes 16 pairs of boots per pair of shoes 5 pairs of boots per pair of shoes C

5. The price of trade Suppose that Hungary and Luxembourg both produce boo and shoes. Hungary's opportunity cost of producing a pair shoes is 4 pairs of boots while Luxembourg's opportunity cost of producing a pair of shoes is 12 pairs of boots. By comparing the opportunity cost of producing shoes in t two countries, you can tell that has a comparative has a A advantage in the production of shoes and comparative advantage in the production of boots. Suppose that Hungary and Luxembourg consider trading shoes and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each pair of shoes it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it receives more than of shoes for each pair of boots it exports to Hungary. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of boots) would allow both Luxembourg and Hungary to gain from trade? Check all that apply. 7 pairs of boots per pair of shoes 1 pair of boots per pair of shoes 16 pairs of boots per pair of shoes 5 pairs of boots per pair of shoes C

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 that France and Switzerland both produce fish and wine. France's opportunity cost of producing a bottle of wine is 5 pounds of fish while Switzerland's opportunity cost of producing a bottle of wine is 11 pounds of fish. By comparing the opportunity cost of producing wine in the two countries, you can tell thatFrance has a comparative advantage in the production of wine andSwitzerland has a comparative advantage in the production of fish. Suppose that France and Switzerland consider trading wine and fish with each other. France can gain from specialization and trade as long as it receives more than5 pounds of fish for each bottle of wine it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than5 bottles of wine for each pound of fish it exports to France. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of fish) would allow both Switzerland and France to gain from…
QUESTION 9 If Pedro can produce more bread in one day than Roger can produce in one day, then а. Pedro has a comparative advantage in the production of bread. b. Roger has a comparative advantage in the production of bread. C. Pedro has an absolute advantage in the production of bread. d. Roger has an absolute advantage in the production of bread. a d. QUESTION 10 the equilibrium price decreases, and the equilibrium quantity increases the equilibrium price increases, and the effect of quantity is ambiguous the equilibrium price increases, and the equilibrium quantity increases the equilibrium price decreases, and the equilibrium quantity decreases If the demand of soccer balls increases, then a. b. C. d. O a O b O O O O
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5. The price of trade Suppose that Greece and Austria both produce rye and wine. Greece's opportunity cost of producing a bottle of wine is 5 bushels of rye while Austria's opportunity cost of producing a bottle of wine is 11 bushels of rye. By comparing the opportunity cost of producing wine in the two countries, you can tell that has a comparative advantage in the production of wine and has a comparative advantage in the production of rye. Suppose that Greece and Austria consider trading wine and rye with each other. Greece can gain from specialization and trade as long as it receives more than of rye for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than of wine for each bushel of rye it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of rye) would allow both Austria and Greece to gain from trade? Check all that apply. 2 bushels of rye…
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5. The price of trade Suppose that Hungary and Luxembourg both produce boots and wheat. Hungary's opportunity cost of producing a bushel of wheat is 5 pairs of boots while Luxembourg's opportunity cost of producing a bushel of wheat is 9 pairs of boots. By comparing the opportunity cost of producing wheat in the two countries, you can tell that production of wheat and has a comparative advantage in the production of boots. has a comparative advantage in the Suppose that Hungary and Luxembourg consider trading wheat and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each bushel of wheat it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it of wheat for each pair of boots it exports to Hungary. receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of boots) would allow both Luxembourg and Hungary to gain from…
Suppose that France and Italy both produce wine and cheese. France's opportunity cost of producing a case of cheese is 5 barrels of wine, while Italy's opportunity cost of producing a case of cheese is 10 barrels of wine. By comparing the opportunity cost of producing cheese in the two countries, you can tell that comparative advantage in the production of cheese and has a comparative advantage in the production of wine. Suppose that France and Italy consider trading cheese and wine. France can gain from specialization and trade as long as it receives more than of wine for each case of cheese it exports to Italy. Similarly, Italy can gain from trade as long as it receives of cheese for each barrel of wine it exports to France. more than Based on your answer to the last question, a price ratio between benefit both countries. has a barrels of wine per case of cheese will
ALS ISES V y tools ge Success Tips er Success Tips . SIGN OUT 18 W PPF Shenandoah has a comparative advantage in the production of production of . NNN ALMONDS (Ms of pounds) 3 ****** (spuned to su Shenandoah a comparative advantage. After specialization, the two countries can produce a total of or base Note: Dashed drop lines will automatically extend to both aves. 41 Suppose that Shenandoah and Congaree agree to trade. Each country focuses es resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 8 million pounds of almonds for 8 milion pounds of basil. This ratio of goods is known as the price of trade between Shenandoah and Congaree. The following graph shows the same PPF for Shenandoah as before, as well as its initial consumption at point A. Place a black point (plus symbol)on the graph to indicate Shenandoah's consumption after trade. 16 true 4 False 44 Shenandoah 24 12 ALMONOS (MAons of pounds) 41 40 45 while Congaree has a…
5. The price of trade Suppose that Italy and Switzerland both produce jeans and stained glass. Italy's opportunity cost of producing a pane of stained glass is 3 pairs of jeans while Switzeriand's opportunity cost of producing a pane of stained glass is 9 pairs of jeans. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that has a comparative advantage in the production of stained glass and has a comparative advantage in the production of jeans. Suppose that Italy and Switzerland consider trading stained glass and jeans with each other. Italy can gain from specialization and trade as long as it receives more than of jeans for each pane of stained glass it exports to Switzerland. Similarly, Switzerland can gain from trade as long of stained glass for each pair of jeans it exports to Italy. as it recelves more than Based on your answer to the last question, which of the tollowing prices of trade (that is, price of stained glass in terms of…