3/25/22, 10:56 PMAssignment Print View7.The graphs below show the production possibilities frontiers for grapes and lemons in Spain and Argentina, with their current levels of production marked aspoints A and B. Spain and Argentina are trading partners, where the terms of trade are 1 million tons of grapes = 0.2 million tons of lemons or 1 million tonsof lemons = 5 million tons of grapes. Each year, 4 million tons of grapes are exported.Spain's Production Possibilities14131211109.87A4210.40.81.21.62.0Lemons (millions of tons)Argentina's Production Possibilities6.05.55.04.54.03.53.02.52.01.51.00.50.40.81.21.6 2.02.42.8Lemons (millions of tons)Using this information, complete the table below (all values are in millions of tons).https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=7.&postSubmissionView=13252718198728708&wid=D13252718466068729&rol...1/2Grapes (millions of tons)Grapes (millions of tons)ㅇ 50B. 3/25/22, 10:56 PMAssignment Print ViewInstructions: Round your answers to one decimal place.Gains from Trade in Spain and ArgentinaGains from TradeSpainArgentinaBefore trade (current level of production)grapes andlemonsgrapes andlemonsComplete specializationgrapes andlemonsgrapes andlemonsGoods tradedExport:grapes VExport:lemons VAfter tradegrapes andlemonsgrapes andlemonsGainsgrapes andlemonsgrapes andlemonsReferencesNumeric ResponseDifficulty: 3 HardLearning Objective: Evaluate the gains from trade by illustratingthem in a production possibilities model and by calculating themnumerically.https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=7.&postSubmissionView=13252718198728708&wid=13252718466068729&rol...2/2

Given; Term of trade:- 1 million tons of grapes= 0.2 million tons of lemon 1 million tons of lemon=…

7. The graphs below show the production possibilities frontiers for grapes and lemons in Spain and Argentina, with their current levels of production marked as points A and B. Spain and Argentina are trading partners, where the terms of trade are 1 million tons of grapes = 0.2 million tons of lemons or 1 million tons of lemons = 5 million tons of grapes. Each year, 4 million tons of grapes are exported. Spain's Production Possibilities 14 13 12 11 10 8 7 6 4 3 2 1 0.4 0.8 1.2 1.6 2.0 Lemons (millions of tons) Argentina's Production Possibilities 6.0 5.5 5.0 4.5 4.0 3.5 B 3.0 2.5 2.0 1.5 1.0 0.5 0.4 0.8 1.2 1.6 2.0 2.4 2.8 Lemons (millions of tons) Grapes (millions of tons) Grapes (millions of tons)

7. The graphs below show the production possibilities frontiers for grapes and lemons in Spain and Argentina, with their current levels of production marked as points A and B. Spain and Argentina are trading partners, where the terms of trade are 1 million tons of grapes = 0.2 million tons of lemons or 1 million tons of lemons = 5 million tons of grapes. Each year, 4 million tons of grapes are exported. Spain's Production Possibilities 14 13 12 11 10 8 7 6 4 3 2 1 0.4 0.8 1.2 1.6 2.0 Lemons (millions of tons) Argentina's Production Possibilities 6.0 5.5 5.0 4.5 4.0 3.5 B 3.0 2.5 2.0 1.5 1.0 0.5 0.4 0.8 1.2 1.6 2.0 2.4 2.8 Lemons (millions of tons) Grapes (millions of tons) Grapes (millions of tons)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. The price of trade Suppose that Croatia and Wales both produce ale and broccoli. Croatia's opportunity cost of producing a bushel of broccoli is 5 kegs of ale while Wales's opportunity cost of producing a bushel of broccoli is 10 kegs of ale. By comparing the opportunity cost of producing broccoli in the two countries, you can tell that production of broccoli and has a comparative advantage in the production of ale. has a comparative advantage in the Suppose that Croatia and Wales consider trading broccoli and ale with each other. Croatia can gain from specialization and trade as long as it receives more than of ale for each bushel of broccoli it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of broccoli for each keg of ale it exports to Croatia. Based on your answer to the last question, which of the following prices of trade (that is, price of broccoli in terms of ale) would allow both Wales and Croatia to gain from trade? Check all that…
Question 2: Good Y - 20 18 164 14 12 10 8 6 4 2 Germany's Production Possibilities Frontier Good Y 20 18 16 Spain's Production Possibilities Frontier 2468 10 12 14 16 18 Good X 2468 10 12 14 16 18 20 Good X Refer to the Figure. Germany has a comparative advantage in the production of O neither good and Spain has a comparative advantage in the production of both goods. O Good X and Spain has a comparative advantage in the production of Good Y. O Good Y and Spain has a comparative advantage in the production of Good X. O both goods and Spain has a comparative advantage in the production of neither good.
5. The price of trade Suppose that Ireland and Liechtenstein both produce beets and wheat. Ireland's opportunity cost of producing a bushel of wheat is 5 bushels of beets while Liechtenstein's opportunity cost of producing a bushel of wheat is 11 bushels of beets. By comparing the opportunity cost of producing wheat in the two countries, you can tell that Ireland production of wheat and Liechtenstein has a comparative advantage in the production of beets. Suppose that Ireland and Liechtenstein consider trading wheat and beets with each other. Ireland can gain from specialization and trade as long as it receives more than of beets for each bushel of wheat it exports to Liechtenstein. Similarly, Liechtenstein can gain from trade as of wheat for each bushel of beets it exports to Ireland. long as it 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 beets) would allow both Liechtenstein and Ireland to…
3. Gains from trade 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 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 5 20 Denali 8 16 Suppose that initially Denali uses 1 million hours of labor per week to produce shorts and 3 million hours per week to produce almonds, while Everglades uses 3 million hours of labor per week to produce shorts and 1 million hours per week to produce almonds. As a result, Everglades produces 15 million pairs of shorts and 20 million pounds of almonds, and Denali produces 8 million pairs of shorts and 48 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of…
2. Winners and losers from free trade Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $38. Suppose that the world price of meekies is $36. Assume that if it were to enter the international market for meekies, Meekerton is too small to influence the world price. If Meekerton decides to participate in free trade, then it will Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false. Statement meekies. Meekertonian producers were worse off without free trade than they are with it. Meekertonian consumers were better off without free trade than they are with it. True False True True or False: When a nation is too small to affect world prices, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international trade. False
1. The basis of trade Suppose that Germany and Portugal both produce cheese and wine. Germany's opportunity cost of producing a bottle of wine is 2 pounds of cheese. That is, Germany forgoes the production of 2 pounds of cheese when it produces a bottle of wine. Portugal's opportunity cost of producing a bottle of wine is 1/2 pound of cheese. a comparative advantage in the production of wine. a comparative advantage in the production of cheese.
12. Supposed that an economy opens to international trade and becomes an importer in a particular market. What is the source of the gains from trade? None of these. International producers who have a relatively low marginal cost of production.e International producers who have a relatively high marginal cost of production. International consumers who have a relatively low willingness to pay. International consumers who have a relatively high willingness to pay. 16. In the market for coffee, demand is given by Q = 10 - P, and supply is given by Q = P, where Q represents tonnes of coffee per year. Suppose that the world price is $6. The government has decided to impose an import tariff of $1 per ton of coffee per year. Which of the following is true? !3! Consumer surplus will decrease. Producer surplus will increase. Total surplus will decrease. All of the above. None of the above.
2. Winners and losers from free trade Consider the imaginary economy of Meekerton and the market for meekies, a hypothetical good. Without international trade the domestic price of meekies is $25. Suppose that the world price of meekies is $28. Assume that if it were to enter the international market for meekies, Meekerton is too small to influence the world price. If Meekerton decides to participate in free trade, then it will export meekies. Given current economic conditions in Meekerton, complete the following table by indicating whether each of the statements is true or false. Statement Meekertonian producers were better off without free trade than they are with it. Meekertonian consumers are better off under free trade than they were before. O True o False True False True or False: When a nation is too small to affect world prices, allowing free trade will sometimes decrease total surplus in that country, regardless of whether it imports or exports as a result of international…
Figure 9-1 PRICE (Dollars per unt of coffee) 70 8 50 10 с B P Uganda TI/ 9 D Domestic Supply 15 QUANTITY (Units of coffee) Domestic Demand World Price 20 Refer to Figure 9-1. From the figure it is apparent that Uganda will export coffee if trade is allowed. Uganda will import coffee if trade is allowed. Uganda has nothing to gain either by importing or exporting coffee. O the world price will fall if Uganda begins to allow its citizens to trade with other countries.
Q26 Consider two countries that can produce rice and other products. If neither country has an absolute advantage in the production of rice, ... a. There is no possibility that either country will import rice from the other. b. The opportunity cost of producing rice must be identical in the two countries. c. Rice will still be traded as long as one of the countries has a comparative advantage in its production. d. Neither country can possibly have a comparative advantage in the production of rice. e. Then rice should not be produced.
4. Terms of trade Suppose that Portugal and Germany both produce fish and cheese. Portugal's opportunity cost of producing a pound of cheese is 3 pounds of fish while Germany's opportunity cost of producing a pound of cheese is 11 pounds of fish. By comparing the opportunity cost of producing cheese in the two countries, you can tell that production of cheese and has a comparative advantage in the production of fish. Suppose that Portugal and Germany consider trading cheese and fish with each other. Portugal can gain from specialization and trade as long as it receives more than of fish for each pound of cheese it exports to Germany. Similarly, Germany can gain from trade as long as it of cheese for each pound of fish it exports to Portugal. receives more than has a comparative advantage in the Based on your answer to the last question, which of the following terms of trade (that is, price of cheese in terms of fish) would allow both Germany and Portugal to gain from trade? Check all…