ALSISES Vy toolsge Success Tipser Success Tips.SIGN OUT18WPPFShenandoah has a comparative advantage in the production ofproduction of. NNNALMONDS (Ms of pounds)3 ******(spuned to suShenandoaha comparative advantage. After specialization, the two countries can produce a total ofor baseNote: Dashed drop lines will automatically extend to both aves.41Suppose that Shenandoah and Congaree agree to trade. Each country focuses es resources on producing only the good in which it has a comparativeadvantage. The countries decide to exchange 8 million pounds of almonds for 8 milion pounds of basil. This ratio of goods is known as the price oftrade between Shenandoah and Congaree.The following graph shows the same PPF for Shenandoah as before, as well as its initial consumption at point A. Place a black point (plus symbol)onthe graph to indicate Shenandoah's consumption after trade.16true4False44Shenandoah2412ALMONOS (MAons of pounds)4140 45while Congaree has a comparative advantage in theSuppose that Shenandoah and Cangaree specialize in the production of the goods in which each hasmillion pounds of almonds and mation poundsor[CongareePP56The following graph shows the same PPF for Congaree as before, as well as its initial consumption at point A1624 3244ALMONDS (MAns of pounds)A64As you did for Shenandoah, place a black point (plus symbol) on the following graph to indicate Cangaree's consumption altertrude(?)24 12ALMONDS (MGons of pounds)56Cigare6414+Consumption Afar Trade+Consumption A TTrue or False: Without engaging in international trade, Shenandoah and Congaree would have been able to consume at the after-trade consumpoonbundles. (Hint: Base this question on the answers you previously entered on this page)

Comparative advantage is a way to measure one's efficiency in a good compared to another good. It is…

Espunad jo sugnd love • Thenandoah *N* ALMONDS (Mors of pounds) M puno su YEYE Congres ALMONDS (ons of pounds) MH Shenandoah has a comparative advantage in the production of production of while Congame has a comparative advantage in the Suppose that Shenandoah and Congaree specialize in the production of the goods in which each has comparative advantage. After specialization, the two countries can produce a total of milion pounds of almonds and mation pounds of best Suppose that Shenandoah and Congaree agree to trade. Each country focuses es resources on producing only the goed in which it has a comparative advantage. The countries decide to exchange 8 million pounds of almonds for 8 milion pounds of basil. This ratio of goods is known as the price of trade between Shenandoah and Congres

Espunad jo sugnd love • Thenandoah N ALMONDS (Mors of pounds) M puno su YEYE Congres ALMONDS (ons of pounds) MH Shenandoah has a comparative advantage in the production of production of while Congame has a comparative advantage in the Suppose that Shenandoah and Congaree specialize in the production of the goods in which each has comparative advantage. After specialization, the two countries can produce a total of milion pounds of almonds and mation pounds of best Suppose that Shenandoah and Congaree agree to trade. Each country focuses es resources on producing only the goed in which it has a comparative advantage. The countries decide to exchange 8 million pounds of almonds for 8 milion pounds of basil. This ratio of goods is known as the price of trade between Shenandoah and Congres

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage: Suppose that the United States and Switzerland produce bicycles and chocolate bars: Bicycles per worker/year Chocolate Bars per worker/year 10,000 20,000 Switzerland 1 United States 5 a. The United States has an absolute advantage in both bicycles and chocolate bars, but which country has a comparative advantage producing bicycles? Chocolate bars? b. Assume there are 10,000 workers. Draw the production possibilities frontier for the United States prior to trade. Assume the two countries agree to exchange 7,000 chocolate bars per bicycle. Illustrate the effect of specialization and trade on the U.S. production possibilities frontier (put bicycles on the x-axis and millions of chocolate bars on the y-axis). c. Assume there are 10,000 workers. Draw the production possibilities frontier for Switzerland prior to trade. Assume the two countries agree to exchange 7,000 chocolate bars per bicycle. Illustrate the effect of specialization and trade on Switzerland's…
Suppose that France and Italy both produce wine and cheese. France's opportunity cost of producing a case of cheese is 5 barrels of wine, while Italy's opportunity cost of producing a case of cheese is 10 barrels of wine. By comparing the opportunity cost of producing cheese in the two countries, you can tell that comparative advantage in the production of cheese and has a comparative advantage in the production of wine. Suppose that France and Italy consider trading cheese and wine. France can gain from specialization and trade as long as it receives more than of wine for each case of cheese it exports to Italy. Similarly, Italy can gain from trade as long as it receives of cheese for each barrel of wine it exports to France. more than Based on your answer to the last question, a price ratio between benefit both countries. has a barrels of wine per case of cheese will
Consider two neighboring island countries called Bellissima and Dolorium. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Rye Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) Bellissima 12 24 Dolorium 8 32 Initially, suppose Bellissima uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Dolorium uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Bellissima produces 12 million bushels of rye and 72 million pairs of jeans, and Dolorium produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence trade between these two countries, each country consumes the amount of rye and jeans it produces. v of…
2. 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.
Which of the following statements is true? A country that has the absolute advantage in producing a good also has the comparative advantage in producing that good. The country with the higher opportunity cost of producing a good has the comparative advantage in producing that good. O There are mutually beneficial gains from trade if opportunity costs differ. A country can have a comparative advantage in the production of all goods.
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Suppose that Poland and Wales both produce ale and glass. Poland's opportunity cost of producing a pane of glass is 4 kegs of ale while Wales's opportunity cost of producing a pane of glass is 12 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell thatWales has a comparative advantage in the production of glass andPoland has a comparative advantage in the production of ale. Suppose that Poland and Wales consider trading glass and ale with each other. Poland can gain from specialization and trade as long as it receives more than of ale for each pane of glass it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than of glass for each keg of ale it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Wales and Poland to gain from trade? Check all that apply. 8 kegs of…
If Country A's opportunity cost for produc 1 pound of cashews is 5 pounds of coffee, and Country B's opportunity cost is 1 pound of coffee, which country has a comparative advantage in cashew production? O the country that can produce the most coffee O the country that can produce the most cashews O Country B O Country A
Suppose the government has imposed a price ceiling on cellular phones. Which of the following events could transform the price ceiling from one that is binding to one that is not binding? Select one: O a. Traditional land line phones become more expensive. O b. Cellular phones become more popular. O. A technological advance makes cellular phone production less expensive. O d. The components used to produce cellular phones become more expensive.
Suppose that Croatia and Wales both produce beets and wheat. Croatia's opportunity cost of producing a bushel of wheat is 4 bushels of beets while Wales's opportunity cost of producing a bushel of wheat is 11 bushels of beets. By comparing the opportunity cost of producing wheat in the two countries, you can tell that production of wheat and has a comparative advantage in the production of beets. Suppose that Croatia and Wales consider trading wheat and beets with each other. Croatia can gain from specialization and trade as long as it receives more than ▼ of beets for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives more of wheat for each bushel of beets it exports to Croatia. than has a comparative advantage in the Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of beets) would allow both Wales and Croatia to gain from trade? Check all that apply. ☐ 6 bushels of…