Figure 3-8Chile's Production Possibilities Frontier20 soybeans181614+12108642(in pounds)2+4 6 8 10 12 14 16 18 20 coffeepounds)(in20 soybeans1855501614+12108642(in pounds)Colombia's Production Possibilities Frontierboth goods and import neither good.neither good and import both goods.2 4 6 8 10 12 14 16 18 20 coffee(in pounds,Refer to Figure 3-8. Chile should specialize in the production ofcoffee and import soybeans.soybeans and import coffee.

Opportunity cost is the cost of the next best thing that you didn’t choose. For example, if you…

Chile's Production Possibilities Frontier ↑soybeans (in pounds) 20 18 16+ 14+ 12 10 8 6 2 A 6 8 10 12 14 16 18 20 coffee 20 18 16+ 14+ 12 10 ↑soybeans 8 6 4 (in pounds) 2 Colombia's Production Possibilities Frontier 6 8 10 12 14 16 18 20 coffee

Chile's Production Possibilities Frontier ↑soybeans (in pounds) 20 18 16+ 14+ 12 10 8 6 2 A 6 8 10 12 14 16 18 20 coffee 20 18 16+ 14+ 12 10 ↑soybeans 8 6 4 (in pounds) 2 Colombia's Production Possibilities Frontier 6 8 10 12 14 16 18 20 coffee

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Production Data Country of Joem - Production Possibilities Corn (tons) Sugar (tons) 01 2 3 4 8 6 4 2 0 Country of Annia - Production Possibilities Corn (tons) Sugar (tons) 0 1 2 3 4 16 12 8 4 0 Preferred Bundle without trade Joem Annia Corn (tons) 2 2 Sugar (tons) 4 8 SCENARIO: You work for a consulting firm that advises countries on trade policy. The countries of Joem and Annia both produce corn and sugar. You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 1. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the…
1. Holland and Aruba can produce ipads and sketch pads. The table below outlines the production possibilities for each producer. Producers/Goods Ipads Computers Holland 6 2 Aruba 10 5 Who has the absolute advantage in producing ipads?
QUESTION 12 wine 88185432 90 80 70 60 50 40 30 20 PPF Portugal CPF 10 0 0 10 20 30 40 50 60 cloth wine 8818588 90 80 70- 60 +09 40 30- 20 England PPF CPF 10 0 0 10 20 30 40 50 60 cloth 12. If Portugal has a total of 90 man-hours of resources available for production, while England has only 30, what are the resource costs of wine and cloth? a) wine costs 1/2 man-hours/bottle and cloth costs 1/2 man-hours/yard in England. b) wine costs 1 man-hour/bottle and cloth costs 1 man-hour/yard in England. c) cloth costs 1 man-hours/yard and wine costs 1 man-hours/bottle in Portugal. d) wine costs 1/2 yards/bottle and cloth costs 2 bottles/yard in Portugal.
Perry's Production Possibilities Frontier 20 18 16 14 12 10 8 6 4 2 poems 12 3 4 5 6 + 7 8 H> novels I poems 20 18+ 16 14 12 10 8 6 4 2 1 2 Jordan's Production Possibilities Frontier + 3 4 + + 5 6 7 8 novels Refer to Figure 3-4. Perry has a comparative advantage in the production of novels and Jordan has a comparative advantage in the production of poems. poems and Jordan has a comparative advantage in the production of novels. novels and Jordan has a comparative advantage in the production of neither good. neither good and Jordan has a comparative advantage in the production of novels.
Figure 1 CASHEWS (Pounds) 400 360 320 + 280 240 Peru's PPF 200 160 120 A O 80 40 15 hour Refer to Figure 3-2. If the production possibilities frontier shown is for 32 hours of production, then how long does it take Peru to make one pound of cashews? hour 1 2 3 hours 7.5 hours 3 4 5 6 7 8 PEANUTS (Pounds) 9 10
The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative D and for the United States is alternative S. Product Apparel Chemicals (tons) Product Apparel Chemicals (tons) (Click to select) ✓ China Production Possibilities A 10,000 0 units B 8,000 4 6,000 8 U.S. Production Possibilities R S 30,000 24,000 0 6 T 18,000 12 ton(s) D 4,000 12 U 12,0000 18 E 2,000 16 V 6,000 24 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? F 0 20 W 0 30 If so, what product should each produce? China should produce (Click to select) The United States should produce (Click to select) ✓ b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: Chemicals:
The sccompanying hypothetical production possibilities tables are for New Zesiand and Spain. Esch country can produce spples and plums New Zealand's Production Possibllities Table (Millions of Bushels) Production Alternatives Product Apples 28 60 Plus 15 18 Spain's Production PossIblilties Table (Millions of Bushels) Production Alternatives Product Apples Plums 20 48 20 a. Plotthe production possibilities dsta for esch of the two countries separatejy. Show the tracling possibilities lines for each nation if the sctusl terms of trade sre 1 plum for 2 spples. Instructions: (I Use the tools provided, 'PPC NZ' snd 'PPC SP iplat 4 polnts esch) to drsw the PPC curves. (2) Use the tool provided, ToT, in esch diegram (elot 4 points esch) to draw the trading possibilities lines for esch nation. To earn full credit, you must correctly plot al points for esch Iine. New Zealand Spain Tools 140 Tools 120 TOT PPC s TOT 100 80 40 40 20 20 5 10 15 20 25 30 35 40 10 20 30 40 50 60 70 80 Plums (millions…
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
10 specialization increases productivity a De creasing revenue b increa my marginal returns increating opportunity costs d. increasing marginal с output.
QUESTION 9 product Y product Y 28 # 20 16 12 00 8 4 0 28 24 20 16 12 8 4 0 0 Fig. A Production Possibilities Frontier 4 PPFO PPFO 4 8 PPFn 8 12 Fig. C Production Possibilities Frontier PPFn 16 12 Point E 20 24 product X 16 Point E 20 product Y 2 product Y 28 20 16 12 8 4 0 20 16 12 8 4 0 0 Fig. B Production Possibilities Frontier 0 PPFO 4 8 4 PPFo PPFn 12 8 24 product X 09. In figure A the shift of the Production Possibilities Frontier outward would be best explained by: O (a) a movement towards efficient production. O (b) an increase in demand for both products. (c) an increase in specialization of resources. O (d) an increase in available resources specific to the production of good X. (e) an increase in available resources specific to the production of good Y. Fig. D Production Possibilities Frontier PPF 16 Point E 12 20 24 product X 16 Point E 20 24 product X
tea while Sylvania has a comparative advantage in the Candonia has a comparative advantage in the production of production of potatoes ▼ Suppose that Candonia and Sylvania specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of 24 million pounds of tea and 24 million pounds of potatoes. A-Z Suppose that Candonia and Sylvania agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 4 million pounds of potatoes for 4 million pounds of tea. This ratio of goods is known as the price of trade between Candonia and Sylvania. The following graph shows the same PPF for Candonia as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Candonia's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. Candonia 32 28 5:15…
Figure 2.2. Canadian Trade Possibilities Televisions 16 12 8 4 0 Canada's Transformation Schedule Televisions 8 12 International Terms of Trade Refrigerators Televisions and refrigerators Neither televisions nor refrigerators с 16 20 B 24 Figure 2.2 shows a straight-line production possibilities curve with televisions on the vertical axis and refrigerators on the horizontal axis for Canada. The intercept on the vertical axis equals 16 and on the horizontal axis equals 24. Point A shows a point where an indifference curve is tangent to the production possibilities curve where televisions on the vertical axis equal 8 and refrigerators on the horizontal axis equal 12. A downward sloping straight line representing the international terms of trade starts at a point where refrigerators equal 24; an indifference curve is tangent to this line at a point where televisions equal 12 and refrigerators equal 16. Referring to Figure 2.2, Canada has a comparative advantage in: Refrigerators