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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4.
Terms of trade Suppose that Greece and Austria both produce oil and wine. Greece’s opportunity cost of producing a bottle of wine is 4 barrels of oil, while Austria’s opportunity cost of producing a bottle of wine is 10 barrels of oil. By comparing the opportunity cost of producing wine in the two countries, you can tell that ______(Greece / Austria) has a comparative advantage in the production of wine, and ______(Greece / Austria) has a comparative advantage in the production of oil. Suppose that Greece and Austria consider trading wine and oil with each other. Greece can gain from specialization and trade as long as it receives more than _______(1/4barrel / 1/10barrel / 1barrel / 4barrels / 10barrels) of oil for each bottle of wine it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than _______(1/4barrel / 1/10barrel / 1barrel / 4barrels / 10barrels) of wine for each barrel of oil it exports to Greece. Based on answers…
Figure 9-1 The figure illustrates the market for coffee in Guatemala 130 88888888 140 130 120- 110 100 90 70+ S 50 RRS 40 30 89 20 10- Price & 12 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 9. Refer to Figure 9-1. With trade, Guatemala will a. export 22 units of coffee b. export 10 units of coffee. c. import 30 units of coffee. d. import 12 units of coffee. Domestic supply World price Domestic demand + 42 44 46 48 50 52 Quantity
Suppose there are three countries in the world: Portlandia, Sanaton, and Volcania. These three countries produce a total of 3 different kinds of goods: Raspberries, Pomegranates, and Grapefruits. If Portlandia imposes some protectionist measures on Raspberries from Sanaton, and Volcania. OThe price of Raspberries in Portlandia will increase for everyone OThe Raspberries industry in Volcania will benefit OThe Raspberries in Sanaton will be the only one to see higher prices for this product
The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 8 ↑ Price 20 10 200 400 600 300 units of the good. Refer to Figure 9-22. With free trade, the country imports 600 units of the good. 900 units of the good. – 1,200 units of the good. 800 1000 1200 1400 1600 1800 2000 2200 Domestic Supply Domestic Demand 2400 Quantity
3. Trade creation and trade diversion Suppose that with free trade, the cost to the United States of importing a calculator from Mexico is $12.00, and the cost of importing a calculator from China is $10.00. A calculator produced in the United States costs $16.00. Suppose further that before NAFTA, the United States maintained a tariff of 25% against all calculator imports. Then, under NAFTA, all tariffs between Mexico and the United States are removed, while the tariff against imports from China remains in effect. Assume that the tariff does not affect the world price of calculators. In the following table, indicate which country the United States imported calculators from before NAFTA. Then indicate which country the United States imported calculators from under NAFTA. Check all that apply. (Note: Leave the row blank if the United States doesn't import from either country.) Scenario Before NAFTA Under NAFTA Stakeholder United States Imports from... Mexico China In the following…
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4. Suppose that Egypt and the EU can only trade in cotton and wheat. Egyptian economy is smaller than that of the EU. The opportunity cost of 1 yard of cotton is 1.2 kg of wheat in Egypt. The world price of 1 yard of cotton is 1.1 kg of wheat. If there are no obstacles to trade, all markets are perfectly competitive and transportation is costless, then most likely in the long run. a. Egypt will import both cotton and wheat. b. Egypt will export both cotton and wheat. c. Egypt will export cotton and import wheat. d. Egypt will export wheat and import cotton. 5. For a fixed exchange rate system, if the home demand for the foreign currency increases, then a. The exchange rate is forced to change for sure. b. None of the statements is true c. The supply of the foreign currency by home central bank or treasury department would increase, so that the fixed. d. the supply of the foreign currency by foreign countries would automatically increase, so that the exchange rate
Production Data Country of Joem - Production Possibilities Corn (tons) Sugar (tons) 01 2 3 4 8 6 4 2 0 Country of Annia - Production Possibilities Corn (tons) Sugar (tons) 0 1 2 3 4 16 12 8 4 0 Preferred Bundle without trade Joem Annia Corn (tons) 2 2 Sugar (tons) 4 8 SCENARIO: You work for a consulting firm that advises countries on trade policy. The countries of Joem and Annia both produce corn and sugar. You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 1. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the…
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.