Assume that the countries of Minami Iwo Jima¹ (Minami for simplicity) and Stormwind² ca I produce two goods: fishy strawberries (Scientists have been experimenting with so-called "anti- freeze genes" found in cold water fish like Sea Flounder and Arctic Char. When implanted into fruits and vegetables like potatoes, tomatoes and strawberries, the gene acts to makes the plant in question more resistant to freezing in bad weather) and golden blueberries (this is from my imagination). The table below describes the production possibilities: Minami Stormwind Fishy Strawberries 20 20 Golden Blueberries 70 50 Questions: 1. Given the above Table, explain which country has a comparative advantage in the production of what good (make sure to clearly explain your answer, do not just say country x) 2. Assume that in autarky Minami is producing 9 units of strawberries and 38.5 of blueberries. Stormwind is producing 8 units of strawberries and 30 of blueberries. Illustrate the gains from trade (if any)

Assume that the countries of Minami Iwo Jima¹ (Minami for simplicity) and Stormwind² ca I produce two goods: fishy strawberries (Scientists have been experimenting with so-called "anti- freeze genes" found in cold water fish like Sea Flounder and Arctic Char. When implanted into fruits and vegetables like potatoes, tomatoes and strawberries, the gene acts to makes the plant in question more resistant to freezing in bad weather) and golden blueberries (this is from my imagination). The table below describes the production possibilities: Minami Stormwind Fishy Strawberries 20 20 Golden Blueberries 70 50 Questions: 1. Given the above Table, explain which country has a comparative advantage in the production of what good (make sure to clearly explain your answer, do not just say country x) 2. Assume that in autarky Minami is producing 9 units of strawberries and 38.5 of blueberries. Stormwind is producing 8 units of strawberries and 30 of blueberries. Illustrate the gains from trade (if any)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 6SCQ: Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram...

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This question concerns the Ricardian Model. In autarky, the relative price of a Computer (in terms of barrels of Beer) in Country A is 25B/C. In autarky in Country B, the same relative price is 40B/C. If the two countries open to trade, which country will export Beer? Give one possible world equilibrium price of Computers once trade has been opened (there are an infinite number).
Assume two countries (the U.S. and China) produce and consume only two goods (smartphones and corn) which are produced using only two factors of production (labor and capital). Assume further that the production of corn is capital-intensive, while production of smartphones is labor-intensive. Assume that the U.S. has 200 units of labor and 150 units of capital, while China has 500 units of labor and 150 units of capital. Construct the Edgeworth box for each country. For each Edgeworth box, let the origin for the corn industry be at the bottom left corner of the Edgeworth box, the vertical axis represents labor and the horizontal axis represent capital. Explain how the two Edgeworth boxes differ. Graphically, illustrate the points of efficient production and explain why these points are efficient. (Hint: What are the curves? What do they represent? What are the slopes of these curves? What do the slopes represent?)
In the Heckscher-Ohlin model, suppose the two factors of production are: high-skilled labor (H) and regular labor (L). The two sectors are manufacturing and business services. Manufacturing uses regular labor more intensively, and business services uses high-skilled labor more intensively. The two countries are the U.S. and China, and the U.S. has a comparative advantage in business services. a. Illustrate the effect of opening up to trade on the U.S. with the PPF and indifference curve diagram. Make sure you clearly label everything. What happens to the relative price of business services in the U.S.? Show clearly the gains from trade. b. What happens to the relative wage of high-skilled labor? Does inequality (the skill premium) increase? Show all work and explain. 2. Evidence for or against Heckscher-Ohlin model Leontieff Paradox i. Briefly describe the paradoxii.We discussed several explanations for the paradoxical result in class. Briefly describe two explanations. Inequality…
Assume Indonesia and China are trading partners. Indonesia initially exports palm oil to and imports lubricants from China. Using the standard trade model, explain how an increase in the relative price of palm oil, in relation to lubricant prices, would affect production and consumption of palm oil for Indonesia (assuming that the taste for both goods is the same in both countries). If the income effect of price change of palm oil is greater than the substitution effect, what would happen to palm oil consumption in Indonesia?
Consider a model with two countries, France and Germany. France exports wine to Germany, and Germany exports beer to France. In each country, the demand for wine is given by the demand curve Q D = 100 - P W, where Q D is the quantity demanded and P W is the price of wine. In each country, the demand for beer is given by the same demand curve, i.e., Q D = 100 – P B , where Q D is the quantity demanded and P B is the price of beer. The supply of wine in France is given by Q S = 2P W, where Q S is the quantity supplied, and the supply of wine in Germany is given by Q S = P W. The supply of beer in France is given by Q S = P B , and the supply of beer in Germany is given by Q S = 2P B . Suppose the government of France imposes a $10 per unit import tax on beer. Find the world price of beer, the domestic price in France, and the tariff revenue collected by the French government under this policy.
Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume the 2 states—Futland and Tandam share a common currency (allowing us to ignore exchange rate), they both have the same wages, and they both produce two goods: bicycles and boots. The units of labour requirement are shown below, assuming constant returns to scale. Production Techniques: Units of labour hour required per unit output Tandom Futland Bicycles 90 hours 120 hours Boots 30 hours 50 hours i. Briefly explain absolute advantage theory by Adam Smith and comparative advantage theory by David Ricardo. Which country has an absolute advantage in the production of each good?
Trade theories suggest that both countries gain from trade. In a 2-country, 2-good model, we assume the 2 states—Futland and Tandam share a common currency (allowing us to ignore exchange rate), they both have the same wages, and they both produce two goods: bicycles and boots. The units of labour requirement are shown below, assuming constant returns to scale. Production Techniques: Units of labour hour required per unit output Tandom Futland Bicycles 90 hours 120 hours Boots 30 hours 50 hours Define opportunity cost. Using the table above, calculate the opportunity cost of bicycles in terms of boots and the opportunity cost of boots in terms of bicycles for each of the countries.
1) https://openstax.org/books/principles-macroeconomics-2e/pages/20-1-absolute-and-comparative-advantage 2) https://openstax.org/books/principles-macroeconomics-2e/pages/20-2-what-happens-when-a-country-has-an-absolute-advantage-in-all-goods 3) https://openstax.org/books/principles-macroeconomics-2e/pages/20-4-the-benefits-of-reducing-barriers-to-international-trade please I need a short summary of these articles
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As you did for Maldonia, place a black point (+ symbol) on the following graph to indicate Lamponia's consumption after trade. Lamponia 64 56 Consumption After Trade 48 40 32 24 PPF 16 16 24 32 40 48 56 64 LEMONS (Millions of pounds) True or False: Without engaging in international trade, Maldonia and Lamponia would not have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.) True False SUGAR (Millions of pounds)