Figure 1. The PPFs of Nation 1 and Nation 2 Nation 1 Nation 2 Corn Corn Tons) B' B Bananas (tons) Bananas 1) Nation 1 has decreasing opportunity costs in the production of bananas and, with specialization, produces at point B. 2) Nation 1 has increasing opportunity costs in the production of bananas and, with specialization, produces at point B. 3) Nation 1 has increasing opportunity costs in the production of corn and, with specialization, produces at point B. Nation 1 has increasing opportunity costs in the production of bananas and, A'

Figure 1. The PPFs of Nation 1 and Nation 2 Nation 1 Nation 2 Corn Corn Tons) B' B Bananas (tons) Bananas 1) Nation 1 has decreasing opportunity costs in the production of bananas and, with specialization, produces at point B. 2) Nation 1 has increasing opportunity costs in the production of bananas and, with specialization, produces at point B. 3) Nation 1 has increasing opportunity costs in the production of corn and, with specialization, produces at point B. Nation 1 has increasing opportunity costs in the production of bananas and, A'

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 84 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the production of Suppose that Maldonia and Lamponia 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 sugar and million pounds of grain. Suppose that Maldonia ánd Lamponia 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 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the price of trade between Maldonia and Lamponia. W SUGAR (MIlons of pounds) SUGAR (MIlions of pounds)
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The following table shows how many tonnes of dairy products and beef products can be produced in Country 1 and Country 2 with one unit of equivalent resources. Country 1 Country 2 Dairy Products (tonnes) 15 15 Beef Products (tonnes) 5 25 ..... a. Which country has an absolute advantage in dairy products? In beef products? Explain. Whoever is able to produce absolute advantage of producing that product. advantage in dairy production. production. with the same amount of resources has the has the absolute has the absolute advantage in beef A *****
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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 B and for the United States is alternative U. China Production Possibilities Product A B D E F 120,000 48,000 Apparel Chemicals(tons) 96,000 72,000 24,000 24 48 72 96 120 Customize and control Google Chrome U.S. Production Possibilities Product R S T U V W Apparel Chemicals(tons) 40,000 32,000 24,000 16,0000 8,000 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? (Click to select) ♥ If so, what product should each produce? China should produce (Click to select) V The United States should produce (Click to select) V b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: units Chemicals: ton(s) c. What are the limits of the terms of trade? units of…
Consider the following information: Country A's opportunity cost of producing vegetables is lower than Country B's. Country B's opportunity cost of producing electronics is lower than Country A's. Country A is absolutely better at producing both goods. If the two countries decide to specialize and trade then: O Each country will be able to produce and consume at a point outside their production possibilities frontier. O Each country will be able to consume at a point outside their production possibilities frontier. O Each country will be able to produce at a point outside their production possibilities frontier. O Each country's production possibilities frontier will shift outward. « Previous Next ASUS 17 6 8
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In Bangladesh, it takes 300 labor hours to produce one TV set and 5 hours of labor to produce one unit of textiles. The unit labor costs for the same goods in the U.S. are 100 labor hours to produce one TV and 2 labor hour to produce one unit of textiles. Tv Textiles 100 2 Bangladesh 300 5 U.S. Which country has an absolute advantage in the production of textiles? Which country has a comparative advantage in textiles? The * has an absolute advantage in the production of textiles as its unit labor costs are * than that of Bangladesh. The opportunity cost of textiles in the U.S is and in Bangladesh is * has a comparative advantage in textiles. Determine the range of international relative price of TV sets with respect to textiles. The range for the international relative price of the TV sets with respect to textiles is and