a. Without trade, what is the price of white socks (in trms of red socks) in Boston? What is the price in Chicago? b. Which city has an absolute advantage in the production of each color sock? Which city has a comparative advantage in the production of each color sock?
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- You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries?…Which of the following statements is false? Question 7Answer a. If the United States imposes a tariff on Japanese car imports, the price of cars in the United States is likely to increase. b. If Japan imposes a quota on car exports to the United States, the price of cars in the United States is likely to increase. c. If the United States imposes a quota on Japanese car imports, the price of cars in the United States is likely to increase. d. If Japan imposes a subsidy on car exports to the United States, the price of cars in the United States is likely to increase.The countries of Nickeltown and Lykesville each produce two goods: Ovens and Dishwashers. The table below lists the production for each good, for each country per year when each country uses half of their resources to produce each good. Country Production of Ovens Production of Dishwashers Nickeltown 105 Lykesville 147 What is the opportunity cost of producing 1 Ovens in Nickeltown Dishwashers 70 42 What is the opportunity cost of producing 1 Ovens in Lykesville Dishwashers ONickeltown OLykesville ONot enough information Which country has a comparative advantage in producing Ovens?
- Because Zambia participates in international trade in the market for soybeans, it will import tons of soybeans. Now suppose the Zambian government decides to impose a tariff of $10 on each imported ton of soybeans. Under the tariff, the price Zambian consumers pay for a ton of soybeans becomes , and Zambia will import tons of soybeans. Use the following graph to show the effects of the $10 tariffEconomists argue for free trade in import markets because importing goods decreases total surplus. no one is made worse off by importing goods. all consumers and producers benefit from importing goods. O the gains to the U.S. producers outweigh the losses to the U.S. consumers the gains to the U.S. consumers outweigh the losses to the U.S. producersIf a country removes a tariff on imported shoes, we expect the domestic price of shoes to and the number of shoes consumed in the domestic market to a. fall; fall b. fall; rise c. rise; fall d. rise: rise
- Imagine that Beth is the best florist in the world and the best pianist in the world. But can earn more as a florist than a pianist. Using this example explain the difference between comparative and absolute advantage and tell us what profession Beth should pick.The graph below shows a small country that produces wine, with no international trade, existing in a state of autarky. 0 Price (dollars per barrel) 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 Market for Wine S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Quantity (millions of barrels) Tools Pworld i Q₁ -8 Q₁ a. What is the initial market price and quantity of wine traded in equilibrium? Ре Pe: $ per barrel Qe million barrels Now suppose this small country opens its market to international trade. Suppose the world price of wine is $60 per barrel. b. Use the graph above to indicate the world price, the new domestic quantity supplied (Q), and the new domestic quantity demanded (Qd). Instructions: Use the tool provided "Pworld" to draw a horizontal world price such that the first point touches the vertical axis. Use the tools provided "Qs" and "Qd" to indicate the domestic quantity supplied and domestic quantity demanded. million barrels of wine. c. At the world price of $60 per barrel, this…Consider that the market for ethanol in Brazil is described by the following equations: Demand: P = 20-0.5Q Supply: P = 5 + Q If the government of Brazil allows free trade and the world price is $10, then a. Brazil will import 5 barrels of ethanol per day. b. Brazil will export 10 barrels of ethanol per day. c. Brazil will export 15 barrels of ethanol per day. Brazil will import 15 barrels of ethanol per day. d.
- Suppose that an hour of work in Brazil can produce 1 pound of coffee or 4 pounds of sugar. In Colombia, an hour of work produces 2 pounds of coffee or 5 pounds of sugar. Which country has the absolute advantage in coffee? In sugar? Calculate the opportunity cost of each good in each country. Which country has the comparative advantage in each good? Why? What would be a mutually beneficial terms of trade?Comparative and absolute advantage Elijah and Aneesha are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of squash and maize each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing squash or maize or to produce squash on some of the land and maize on the rest. Squash Maize (Pounds per acre) (Pounds per acre) Elijah 12 3 Aneesha 18 6 On the following graph, use the blue line (circle symbol) to plot Elijah's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF. Elijah's PPF Aneesha's PPF 0 90 180 270 360 450 540 630 720 810 900 180 162 144 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.1. There are two firms, firms A and B. Suppose that the two firms both produce Jam and butter and sell them for the same price. Shown below are the combinations of the two goods each firm can produce using the same amounts of labor and capital. Using the information below, which answer provides the most accurate depiction of comparative advantage and absolute advantage? Firm A Exhibit 1 Firm B Jam Butter Jam Butter 0 120 0 100 20 90 20 80 40 60 40 60 60 30 60 40 80 0 80 20 100 0 Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm B has a comparative advantage in butter, and absolute advantage in jam. Firm A has a comparative advantage in jam, and an absolute advantage in jam.