Below table shows the production possibilities for the country of Emilon: Rice Beef A 0 60 B 70 54 C 126 42 D 168 24 E 196 0 Complete the following (approximate) possibilities for Emilon. a. Emilon can produce 182 rice and beef. b. Emilon can produce rice and 48 beef. Which of the following product combinations is Emilon capable of producing? c Can Emilon produce 140 rice and 48 beef? No, it cannot be produced. d. Can Emilon produce 98 rice and 42 beef? Yes, it can be produced. < Prev 2 of 7 Next >

Below table shows the production possibilities for the country of Emilon: Rice Beef A 0 60 B 70 54 C 126 42 D 168 24 E 196 0 Complete the following (approximate) possibilities for Emilon. a. Emilon can produce 182 rice and beef. b. Emilon can produce rice and 48 beef. Which of the following product combinations is Emilon capable of producing? c Can Emilon produce 140 rice and 48 beef? No, it cannot be produced. d. Can Emilon produce 98 rice and 42 beef? Yes, it can be produced. < Prev 2 of 7 Next >

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In one month, Manal can knit 2 sweaters or 4 scarves. In one month, Tamara can knit 1 sweater or 3 scarves. Given this information, which of the following statements is TRUE? O Manal has a comparative advantage in knitting scarves but not in knitting sweaters O Manal has a comparative advantage in knitting neither sweaters nor scarves O Manal has a comparative advantage in knitting both sweaters and scarves O Manal has a comparative advantage in knitting sweaters but not in knitting scarves
Suppose that Spain and Greece both produce wine and olive oil. The following table shows combinations of the goods that each country can produce in a week (in thousands of liters). Spain Greece Wine Olive Oil Wine Olive Oil 0 16 0 30 1 12 1 24 2 8 2 18 3 4 3 12 4 0 4 6 -- -- 5 0 a. Who has a comparative advantage in producing wine? Who has a comparative advantage in producing olive oil? Explain b. Suppose that Spain is currently producing 1000 liters of wine and 12000 liters of olive oil per week and Greece is currently producing 3000 liters of wine and 12000 liters of olive oil per week. Demonstrate that Spain and Greece can both be better off if they specialise in producing only one good and then engage in trade.
1. The following production possibilities schedule shows the quantities of soybeans and oil that can each be produced in Canada and Mexico with one unit of equivalent resources Refer to the table below. Mexico would not gain by producing and exporting oil and importing soybeans unless it received Canada Mexico Soybeans (bushels) 60 24 Oil (barrels) 10 8 O more than 6 bushels of soybeans per barrel of oil O more than 10 barrel of oil O any quantity of soybeans O more than 3 bushels of soybeans per barrel of oil
7. What is the law of comparative advantage? According to the law of comparative advantage, what should be the distin- guishing characteristics of the goods a nation produces? What should be the distinguishing characteristics of the goods a na- tion imports? How will international trade influence people's production levels and living standards? Explain. 15
Refer to the production possibility frontiers for two friends Frodo and Sam who can both produce Ice creams and Jelly beans. Frodo's maximum production of Ice creams is 500 with no Jelly beans, or 2,000 Jelly beans with no Ice creams. Sam's maximum production of Ice creams is 600 with no Jelly beans, or 1,200 Jelly beans with no Ice creams. ICE CREAMS ICE CREAMS 600 500 1200 JELLY BEANS 2000 JELLY BEANS Frodo' PPF Sam's PPF Answer briefly these TWO questions in the box space provided below. Part A: Assuming efficient production without trade, derive the maximum amount of Jelly beans that can be produced by Sam along with 300 Ice creams. Describe your steps in detail. Part B: Assume that Frodo and Sam agree to specialize in production and trade between themselves. Frodo offers 1,000 Jelly beans to Sam in exchange for 300 lce creams. Would Sam agree to this trade?
A) Which nation has an absolute advantage in the production of cars?B) Which nation has an absolute advantage in the production of red wine?
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Geppetto and Lewis decide that they would like to trade puzzles and puppets in order to better stock their toy store shelves. The table below compares their production possibilities schedules. Production Possibilities Schedules Geppetto Puzzles 100 80 Puppets e 10 20 30 40 50 6. Which producer has the comparative advantage in producing puzzles? 401 8 Puppets 0 6 12 18 Lewis Geppetto Puzzles 40 32 O Lewis O Geppetto 24 Leuds 0 b. Which producer has the comparative advantage in producing puppets? c. If both producers decided to trade with each other to stock their toy stores, the terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles) would be between 0 0.80 and 3.33 puzzles per puppet. 0125 and 0.30 puzzles per puppet. 0 0.80 and 0.30 puzzles per puppet 01.25 and 3.33 puzzles per puppet. m D