6. Suppose individuals specialize in tasks (jobs) for which they have a comparative advantage and trade with others. That leads to a. efficiency, but makes low-skill people even worse off than if they did not trade as much. 1 b. equity, but it reduces efficiency. a balance of efficiency and equity. d. efficiency, making everyone better off than if they did not trade.

6. Suppose individuals specialize in tasks (jobs) for which they have a comparative advantage and trade with others. That leads to a. efficiency, but makes low-skill people even worse off than if they did not trade as much. 1 b. equity, but it reduces efficiency. a balance of efficiency and equity. d. efficiency, making everyone better off than if they did not trade.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the two nations operate in autarky, which of the black points (plus symbol) are attainable for Fireton? Check all that apply. Point A Point B Point C Point D Suppose the two nations decide to trade with each other at a rate of one robot vacuum cleaner per plastic army man (1:1). On the previous graph, use the green line (triangle symbol) to represent the terms of trade to help you find your answer to the following question. You will not be graded on where you place the line on the graph. Which of the grey points (star symbol) that were not attainable by either country in autarky are attainable once the countries agree to trade, holding all else constant? Check all that apply. Point W Point X Point Y Point Z Suppose Fireton and Greenburg engage in trade, and both nations desire the same post-trade consumption bundle. (Note: Assume both countries will not waste any resources.) Greenburg will robot vacuum cleaners.
3. Problems and Applications Q3 Janet and Megan are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Janet takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Megan takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Janet's opportunity cost of brewing a gallon of root beer is has an absolute advantage in brewing root beer, and If Janet and Megan trade foods with each other, and Megan's opportunity cost of brewing a gallon of root beer is has a comparative advantage in brewing root beer. will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.
1. James and Lisa can grow the following units of produce in a period of time: Tomatoes 180 150 James Lisa Peppers 45 50 a. Explain who has absolute advantage in producing each good. b. Calculate the opportunity cost for each producer and each good. c. Explain who has comparative advantage in producing each good.
15. If the U.S. were to stop trading with other nations, economists would predict that in the long run the U.S. would end up with: A. more jobs. B. lower prices. C. a higher standard of living. D. a lower standard of living. 16. The price of American goods have slowed and decreased in part to which of the following: A. Outsourcing. B. Increases in educational scoring. C. law of one price D. globalization and increased trade. 17. If Canadians wanted significantly more French products than usual, the: A. demand curve for the euro would shift right. B. demand curve for the euro would shift left. C. supply curve for the euro would shift right. D. supply curve for the euro would shift left. 18. EU product price levels have stayed the same over the last year while inflation in the US has increased. EU exports will : A. increase and EU. imports decrease, causing the demand for Euros to rise and the supply of Euros to fall. B. decrease and EU. imports increase, causing the demand for Euros to…
11 A trader has an absolute advantage in orange production if his unit-labor requirement in oranges is _____ and his labor productivity is _____ A. lower; higher B. higher; lower C. lower; lower D. higher; higher E. moderate; moderate
QUESTION 1 To ensure that trade benefits all parties involved, a, the trade must involve services as well as goods. b. the trade must be voluntary. c. there must be a difference in comparative advantage. d. specialization through training must occur. O e. money must be exchanged. QUESTION 2 When is marginal analysis needed to make a decision? a, when the choice is between doing more or less of something b. when the choice is between doing something and not doing something c. when the choice is between actions with a quantifiable monetary value d. when the choice is between actions that cannot be assigned a monetary value e. when the choice is between doing something and doing the exact opposite
1.Using the concept of free trade and the 3 free trade theories discussed in the class materials, explain the difference between absolute advantage and comparative advantage. Explain the difference between free trade and fair trade. Provide an example of your own household or work experience.
2. The table below summarizes the number of hours it takes to manufacture cars and dinghy in Germany and PNG. No. of hours to make one car No. of hours to build a dinghy Germany Papua New Guinea 30 20 60 30 a. Which country has an absolute advantage at making cars? Which country has an absolute advantage at making dinghy? b. Estimate the opportunity cost of making car and dinghy in each set of countries. Which country has a comparative advantage for manufacturing cars? Which set of country has a comparative advantage for manufacturing low quality cars? с.
Person 1 can allocate her 8-hour day between the production of two goods. A and B. Each hour devoted to Good B yields 2 units whereas each hour devoted to Good A produces 4 unit. Person 2, can produce 3 units of Good B or 4 units of Good A per hour. 1. Who has the comparative advantage in the production of Good B? a. Person 2 produces more than Person 1 using more resources b. Person 1 produces more than Person 2 using same resources c. Person 2 produce more than Person 1 using less resources d. Person 1 produce with lower opportunity cost e. Neither they both produce same quantity f. Person 1 produce more than Person 2 using more resources g. Person 2 produce more than Person 1 using less resources h. Person 2 produce with lower opportunity cost 2. Who has the comparative advantage in the production of Good A? a. Person 2 produces more than Person 1 using more resources b. Person 1 produces more than Person 2 using same resources c. Person 2 produce more than Person 1 using less…
Comparative advantage explains why people _____. Select one: a. work at the job they love and grow their own food . b. don't grow their own food anymore, but instead they specialize and trade. c. work at the job they love the most. (only) d. grow their own food and make their own clothes instead of shopping for these things. e. specialize in one thing and consumer it all.
B) Comparative Advantage 1. Country A has 100 workers and Country B has 100 workers. Every worker in Country A can produce 6 tons of wheat per year, or can produce 12 tons of corn per year. Every worker in Country B can produce 2 tons of wheat per year, or can produce 10 tons of corn per year. a. Which country has an absolute advantage in wheat? b. Which country has an absolute advantage in corn? c. Which country has a comparative advantage in wheat? d. Which country has a comparative advantage in corn? Suppose initially the countries do not trade and Country A has 50 workers producing corn and 50 producing wheat. Country B has 30 workers producing corn and 70 producing wheat. Fill out the following table: Country A Country B Corn Produced Wheat Produced Now the two countries trade with one another. e. What good does Country A specialize in? f. What good does Country B specialize in? If these countries have all workers produce the product that their country has a comparative advantage…
1. Consider a market of two farmers which are also consumers. The following table contains the maximum production levels over a time period of 8 hours for both wheat and wine. As usual, we assume linear production possibility frontiers. Farmer Wheat Wine 10kg 15kg Albert 21 Berta 11 (a) Identify absolute advantages for each good. (b) Identify comparative advantage. (c) How does the comparative advantage change when calculated over 1 hour of production time? (d) How should Albert and Berta specialise? Who will trade what? (e) Given their production and consumption before trade, Production/Consumption WVheat Wine Albert 5kg 7.5kg 11 Berta 0.51 Assume production changes to the following . 1