Assume Australia, a large country, exports wine and imports cars. Recently climate change has resulted in very wet weather, reducing wine production in Australia, and increasing the world price of wine relative to cars. a. Explain how this can reduce the welfare of Australia, using the production possibility frontier and indifference curve graph to support your answer. b. While the normal conclusion is that Australia loses out from the severe weather, that is not always the case. In fact, Australia can instead experience a gain in welfare from this event. Explain how, using the production possibility frontier and indifference curve graph to support your answer.

Assume Australia, a large country, exports wine and imports cars. Recently climate change has resulted in very wet weather, reducing wine production in Australia, and increasing the world price of wine relative to cars. a. Explain how this can reduce the welfare of Australia, using the production possibility frontier and indifference curve graph to support your answer. b. While the normal conclusion is that Australia loses out from the severe weather, that is not always the case. In fact, Australia can instead experience a gain in welfare from this event. Explain how, using the production possibility frontier and indifference curve graph to support your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

(d) Determine the optimal consumption and production at Home and Foreign under autarky. Depict this situation in a graph that includes each country’s PPF and indifference curves for the representative consumer.
In Italian restaurant, Jack needs 1 hour and a half to prepare pizza and 1 hour to make lasagna. Pascal needs 2 hours to make a pizza and 1 hour and a half to make a lasagna. Which one has the comparative advantage in preparing pizza, in preparing lasagna. Explain your answer. Which one has the absolute advantage in preparing lasagna, in preparing Pizza. Explain your answer.
If people specialize in producing those goods for which they possess a comparative advantage, then the economy as a whole can produce a greater quantity of goods. Select one: a. True b. False
Question 10 If country A is relatively land-abundant and country B is relatively labor-abundant, the Heckscher- Ohlin theory predicts that country A will export textiles (a relatively labor-intensive good) and country B will export corn (a relatively land-intensive good). O True STC False
Classify the below statements as positive or normative statements: • Canada and Japan account for sizeable portions of the other's exports. • The free trade deal reduces tariffs between the two countries and provides increased access to consumer markets for exporters. Canada and Japan should seek other methods of increasing trade. • The free trade deal between Canada and Japan increases the overall economic well-being (economic surplus) of both countries.
1. Suppose Country 1 is a large country in the world and exports footwear and imports machine, where footwear is labor intensive and machine is capital intensive. Suppose that Country 1 attracts a lot of inward FDI. That is, the capital endowments in Country 1 increases. Draw the PPF curve and the offer curve to show what happen to Country l's terms of trade(TOT) and welfare. Please use the graphs with machine in the x-axis and footwear in the y-axis.
Assume there are only two goods in the world: pizza and electric fans. Draw a production possibility frontier (PPF) illustrating the trade-off between the two (specific numbers are not needed – we are only looking for the basic shape of the PPF). On the same graph, draw new frontiers showing 1) what happens if a major plague reduced worldwide population significantly, and 2) if a machine is invented which doubles the number of fans that can be made in a day (but is irrelevant in the production of pizza).
Food 0 Alpha Shelter Beta In the figure are two linear production possibilities curves for countries Alpha and Beta. We can conclude that
With an example, use a production possibility frontier as a straight line, assume that the country has two factors of production, L and K. The payments to the factors are: w = wages (labor) r = rent (capital) Calculate: i) The total cost of production ii) The value of the slope
Question 2. Imagine the country of Zed, which has the following production possibilities curve: Tanks Noodles 0 51 100 45 200 38 300 30 400 21 500 11 600 0 a) What is the opportunity cost between tanks and noodles? Is it constant?Graph the ppc. b) True, false, uncertain, and explain: “This economy should produce 30 noodles and 300 tanks because that is the most even distribution of resources between the two goods.”
Each day, Ted can wax 6 cars or wash 12 cars, and Ishana can wax 3 cars or wash 9 cars. What is each person's opportunity cost of washing a car? Instructions: Enter your responses rounded to two decimal places. Ted's opportunity cost of washing one car is wax jobs. Ishana's opportunity cost of washing one car is wax jobs. Who has a comparative advantage in washing cars? multiple choice Neither Ted