just question 2 please Assume that:• Country A can produce 200 units of grapes or 400 units of wool.• Country B can produce 400 units of grapes or 400 units of wool.Suppose that the two countries sign a free trade deal, resulting in a single world pricefor each good. Assume that the two countries specialise completely, that is, they onlyproduce only good (the one in which they have a comparative advantage).1. Draw a diagram to show an aggregate production possibility frontier without tradeand one with trade (see below), with grapes on the horizontal axis.2. For each country, calculate the opportunity cost of grapes production (units of woolforgone per unit of grapes). State which country has the comparative advantage ineach good.3. With reference to your diagram and analysis above, explain which good each countrywould export (and import) and why the two countries might benefit from such trade.

2. A nation's comparative advantage can be identified by computing the opportunity cost of producing…

Answered: Assume that: • Country A can produce…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 6PA

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Table 33.15 shows how the average costs of production for semiconductors (the chips In computer memories) change as the quantity of semiconductors built at that factory increases. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.
True or False: The source of comparative advantage must be natural elements like climate and mineral deposits. Explain.
How does comparative advantage lead to gains from trade?
In France it takes one worker to produce one sweater, and one worker to produce one bottle of wine. In Tunisia it takes two workers to produce one sweater, and three workers to produce one bottle of wine. Who has the absolute advantage in production of sweaters? Who has the absolute advantage in the production of wine? How can you tell?
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I need help with questions 9 and 10. For question 9, since the x and y value are the same, I dont know how to identify in what type of production Pam has a comparative advantage in. For question 10, I do not understand how to calculate the combined output according to each person's specialization.
Suppose that France and Switzerland both produce fish and wine. France's opportunity cost of producing a bottle of wine is 5 pounds of fish while Switzerland's opportunity cost of producing a bottle of wine is 11 pounds of fish. By comparing the opportunity cost of producing wine in the two countries, you can tell thatFrance has a comparative advantage in the production of wine andSwitzerland has a comparative advantage in the production of fish. Suppose that France and Switzerland consider trading wine and fish with each other. France can gain from specialization and trade as long as it receives more than5 pounds of fish for each bottle of wine it exports to Switzerland. Similarly, Switzerland can gain from trade as long as it receives more than5 bottles of wine for each pound of fish it exports to France. Based on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of fish) would allow both Switzerland and France to gain from…
1. Determine which country has a comparative advantage in each good.
2
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…
Suppose that the world economy consists of Country A and Country B, both of which are of similar size. Both countries produce Good 1 and Good 2. Suppose Country A and Country B open for trade and this results in Country A importing Good 1 from Country B. Which of the following must be true? O Country A has an absolute advantage in Good 1 O Country B has comparative advantage in Good 1 O Country A has comparative advantage in Good 1 O Country B has comparative advantage in Good 2
The table to the right shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. |Barney 28 Fred Pogo Sticks 24 Which of the following statements is true? Unicycles 18 14 O A. Barney has an absolute advantage in making both products. O B. Barney has an absolute advantage in making pogo sticks and Fred in making unicycles. OC. Fred has an absolute advantage in making both products. O D. Barney has an absolute advantage in making unicycles and Fred in making pogo sticks.

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