7. Transportation costs and comparative advantageThe following graph shows a fictional world economy that consists of only two countries, Greenberg and Baxton. Both countries produce cars underincreasing-cost conditions. Note that the left-hand part of the diagram is a mirror image of a standard supply-demand diagram, and therefore thesupply and demand curves slope in directions opposite their usual directions.PRICE OF CARS (Thousands of dollars)+Greenberg+++10987+65SG432110 9 8 7 6 5 4 3 2 1BaxtonCARS++SBDB1 2 3 4 5 6 7 8 9 10? In the absence of trade (that is, autarky), the equilibrium price in Greenberg is $$(Hint: Enter all monetary values in full. For example, $7,000 rather than $7.)In the absence of trade, which of the following statements is correct?IGreenberg and Baxton are equally good at producing cars.Greenberg has a comparative advantage in the production of cars.Greenberg has the comparative disadvantage in production of cars.and the equilibrium price in Baxton is

The term cost refers to the situation under which a firm occurs various expenses during the process…

7. Transportation costs and comparative advantage The following graph shows a fictional world economy that consists of only two countries, Greenberg and Baxton. Both countries produce cars under increasing-cost conditions. Note that the left-hand part of the diagram is a mirror image of a standard supply-demand diagram, and therefore the supply and demand curves slope in directions opposite their usual directions. PRICE OF CARS (Thousands of dollars) Greenberg +5 10 DG 8 N +6 SG -6 4 3 2 10 9 8 7 6 5 4 3 2 1 Baxton CARS SB DB 1 2 3 4 5 6 7 8 9 10 ?

7. Transportation costs and comparative advantage The following graph shows a fictional world economy that consists of only two countries, Greenberg and Baxton. Both countries produce cars under increasing-cost conditions. Note that the left-hand part of the diagram is a mirror image of a standard supply-demand diagram, and therefore the supply and demand curves slope in directions opposite their usual directions. PRICE OF CARS (Thousands of dollars) Greenberg +5 10 DG 8 N +6 SG -6 4 3 2 10 9 8 7 6 5 4 3 2 1 Baxton CARS SB DB 1 2 3 4 5 6 7 8 9 10 ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7.) Who discovered the law of comparative advantage? a.) David Ricardo b.) Robert Torrents c.) David Autor d.) Robert Lucas 8.) Suppose that Bob can produce hamburgers and pasta and has 10 hours of time. Bob can make 10 hamburgers in 1 hour and 2 plates of pasta in one hour. What is Bob's opportunity cost of producing hamburgers? a.) 1/5 b.) 2/5 с.) 3/5 d.) 4/5
24. Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the comparative advantage in cloth? a) Portugal b) England c) Both d) Neither e) Cannot tell
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My dear expert bro hand written not allowed.
13. What is the relative price (opportunity cost) of wine in Portugal, before trade begins? a) 1/2 yard of cloth b) 2 man-hours/bottle c) 1/3 yard of cloth d) 2 yards of cloth e) 3 yards of cloth
17 Which of the following does NOT describe the comparative advantage? Select one: Ⓒa. Economic agents does not specialize in producing a good in which they have the comparative advantage b. Comparative advantage refers to a producer's ability to produce a good at a lower opportunity cost than other producers 888 F4 Oc. Comparative advantage refers to a producer's ability to give up less to produce the good compared to other producers Od. Economic agent with less flat (more steep) production possibilities frontier has comparative advantage in the good on the y-axis e. Economic agent with more flat production possibilities frontier has comparative advantage in the good on the x-axis % 5 F5 6 MacBook Air F6 & 7 AA F7 * 8 DII F8 9 F9 Next ) O
Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Cheese (Pounds) 16 Wine (Bottles) Cheese (Pounds) 12 8. 4. 25 20 15 2 3 3 4 10 4 Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese? O A. France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese. O B. France has a comparative advantage producing wine and cheese. OC. Germany has a comparative advantage producing wine and cheese. -OD. Neither has a comparative advantage producing wine or cheese. OE. France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine. Suppose that France is currently producing 1 bottle of wine and 12 pounds of cheese and Germany is currently producing 3 bottles of wine and 10 pounds of cheese. Then, assume instead that France and…
Problem 1 Refreshing Refreshing Trade Basics - Prices Consider the market for computers in two countries, Uruguay and Indonesia. Let's assume both have perfectly competitive domestic computer markets. In autarky (no trade), the equilibrium price of computers in Uruguay is $500, and 10,000 computers are sold. In Indonesia (under autarky), the equilibrium price of computers is $400 and 8,000 computers are sold. (a) Draw supply and demand (partial equilibrium) graphs for each of these two countries indicating how many computers are sold and at what price when neither country trades (b) Now Uruguay and Indonesia open themselves up to global trade of com- puters. Let's assume the global price of computers is $450. Describe qual- itatively what happens to the price consumers pay for computers in each of these two countries (relative to the original autarky situation) as well as how much domestic producers sell now relative to the no trade world. Also state whether each country is an importer…
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1. Suppose that the country of Greece has only one factor of production, labour, and can produce at most 1500 units of olives and at most 6000 units of cheese. (a) Draw the PPF of Greece, with cheese on the vertical axis. What is the oppor- tunity cost of producing cheese? What must be the relative price of olives for Greece to specialise in producing olives? To produce both goods? Pc