Consider two individuals, Tanek and Kalene each of whom knits sweaters and makes hotdogs, respectively. The gains from trade between Tanek and Kalene are most obvious in which of the following cases?
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- The following graphs show the production possibilities frontiers (PPFS) for Shenandoah and Denali. Both countries produce almonds and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of almonds and 9 million pounds of basil, as indicated by the grey stars marked with the letter A. BASIL (Millions of pounds) 48 42 36 30 24 18 PPF ୯ 12 6 Cả 0 0 I I 6 Shenandoah 18,9 12 18 24 30 36 ALMONDS (Millions of pounds) 42 48 BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF 6 Denali 12 18 24 30 36 42 48 ALMONDS (Millions of pounds) ? Shenandoah has a comparative advantage in the production of , while Denali has a comparative advantage in the production of . Suppose that Shenandoah and Denali specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of basil. million pounds of almonds and2. Working with Numbers and Graphs Q9 The following table summarizes the combinations of goods X and Y that two individuals, Nicki and Kamal, can each produce individually. Nicki Kamal Y Y 300 250 150 30 125 62.5 60 125 If each person specializes in the production of the good for which they have the comparative advantage, then would specialize in the production of good Y, and would specialize in the production of good X. (Hint: Calculate the opportunity cost of producing X and Y for each individual.) Suppose that Kamal and Nicki each specializes in the production of the good in which each has a comparative advantage.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?
- Two planets, Endor and Kamino, both produce two goods, blasters and radio devices. The below graphs show the PPF curves of each planet before specialization. Initially, each planet produces 50,000 radio devices and 5,000 blasters. In total, 100,000 radios and 10,000 blasters are produced. Which planet has a comparative advantage in producing radios and which planet has a comparative advantage in producing blasters? If each planet was to fully specialize in producing one good, how many radios in total would be produced and how many blasters in total would be produced? Suppose that the two planets trade 5,000 blasters for 90,000 radios. Graph and label the new points on each planet’s PPF using the graphs above. What is the outcome of specialization and trade for each planet?When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Glacier and Rainier. Both countries produce corn and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of corn and 9 million pounds of basil, as indicated by the grey stars marked with the letter A. BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF 6 Glacier A 12 18 24 30 36 CORN (Millions of pounds) 42 48 ? BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF I + 6 Rainier 12 18 24 30 36 CORN (Millions of pounds) I 42 48 (?) Glacier has a comparative advantage in the production of while Rainier has a comparative advantage in the production of Suppose that Glacier and Rainier specialize in the production…Assume that two countries Alpha and Beta use a variety of inputs in their production Alpha exports excavating equipment and imports solar cells. Assume furthermore no economies of scale. Select the correct statement from the ones below: Even though there is trade, Alpha has a lower opportunity cost for excavating If the countries did not trade, Alpha would have a lower opportunity cost for excavating Neither country can consume at a point outside its production possibility frontier. Alpha avoids producing solar cells while B avoids producing no excavating
- When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFS) for Freedonia and Sylvania. Both countries produce lemons and sugar, each initially (i.e., before specialization and trade) producing 24 million pounds of lemons and 12 million pounds of sugar, as indicated by the grey stars marked with the letter A. SUGAR (Millions of pounds) 64 56 48 40 32 24 16 8 0 0 PPF 1 Freedonia 24, 12 8 16 24 32 40 48 LEMONS (Millions of pounds) 56 64 (?) SUGAR (Millions of pounds) 64 56 48 40 32 24 16 8 0 PPF 0 8 Sylvania A 16 24 32 40 48 56 64 LEMONS (Millions of pounds) (?) Freedonia has a comparative advantage in the production of while Sylvania has a comparative advantage in the production of . Suppose that Freedonia and Sylvania…Suppose you have a team of two workers: one is a baker and one is a chef. Your baker is talented but is inexperienced. Your chef is not only an elite chef but is also faster at baking. If your kitchen specialized according to absolute advantage, who would do the cooking? Who would do the baking? If your kitchen specialized according to comparative advantage, who would do the cooking? Who would do the baking? Which approach above is more efficient? Explain your answer.Why is comparative advantage more important than absolute advantage in determining whether trade is beneficial?
- When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFS) for Maldonia and Lamponia. Both countries produce lemons and sugar, each initially (i.e., before specialization and trade) producing 24 million pounds of lemons and 12 million pounds of sugar, as indicated by the grey stars marked with the letter A. (? (?) Maldonia Lamponia 64 64 56 56 48 PPF 48 40 40 32 32 24 24 PPF 16 16 16 24 32 40 48 56 64 16 24 32 40 48 56 64 LEMONS (Millions of pounds) LEMONS (Millions of pounds) Maldonia has a comparative advantage in the production of production of while Lamponia has a comparative advantage in the . Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a comparative advantage.…Assume that country A can produce a unit of good X with 1 labor hour and a unit of good Y with 2 labor hours. Country B can produce a unit of good X with 2 labor hours and a unit of good Y with 8 labor hours. Labor is the only resource used. What would be the terms of trade for 1 unit of good Y? Group of answer choices Between 1/2 and 1/8 unit of X. Between 1/2 and 1/4 units of X. Between 2 and 4 units of X. Between 2 and 8 units of X.Suppose the following represents the Canadian production possibilities frontier for two of its most important exports: maple syrup (in millions of bottles) and tree logs (in millions). Please choose the best answer for each question.