Graphically illustrate the equilibrium of an open economy. Discuss also the off-the equilibrium situations condition as well as the equilibrium.
Q: Consumption After Trade PPF 12 18 24 30 36 42 48 POTAT OES (Millione of pounde)
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Q: Measuring the openness of an economy The following table contains information on two hypothetical…
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Q: Recent economic reports suggest that the U.S. economy is operating its resources efficiently. This…
A: The central problem of economics is the scarcity of resources. The unlimited wants and the limited…
Q: The following graph shows the same PPF for Candonia as before, as well as its initial consumption at…
A: Comparative advantage is when a country is able to produce at a lower opportunity cost.
Q: 2 Two countries, Aquarium and Lillbanum, trade with each other. We call the products wild boar…
A: PPF stands for Production Possibility Frontier, which is a graphical representation of the different…
Q: Assume each country's potential output per unit worker per month is given below. (answer questions…
A: Absolute advantage refers to the situation in which a country is able to produce more good by using…
Q: Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have 10 hours of…
A: Absolute Advantage is defined as the ability of a country, individual or a firm to produce goods…
Q: Discuss the impact of the lockdown in China and the war in Ukraine on the global economy
A: SUMMARY- China's retail and modern creation dropped strongly in April, as lockdowns in the nation…
Q: Lowland Working population and production possibilities Working population Production of tons of…
A: A production possibility frontier (PPF) shows the maximum possible output combinations of two goods…
Q: The below table shows the corn markets in Mexico and the US. What is the equilibrium world price…
A: Shortage is a condition where the quantity demanded is greater than quantity supplied at the market…
Q: The following graph shows the same PPF for Candonia as before, as well as its initial consumption at…
A: Production Possibility frontier (PPF) is defined as a graphical representation that shows various…
Q: Freedonia has a comparative advantage in the production of production of , while Sylvania has a…
A: Comparative advantage theory is based on a country's ability to produce a particular good or service…
Q: How can a person who is “better” or more efficient (having an absolute advantage in the production…
A: Absolute advantage refers to a situation in which one individual, business, or country can produce a…
Q: US and South Korea reached formal agreement on a plan to lift S. Korea’s long ban on US beef…
A: South Korea made the decision to prohibit the import of any ruminant livestock stock, including…
Q: Mexico can cultivate either 120 bushels of Oranges per acre or 200 bushels of Bananas per acre. What…
A: Opportunity cost refers to the value of something that must be given up to get the other goods and…
Q: Illustrate the concept of economic growth on the PPC. Describe at least 2 factors that could cause…
A: Production possibility curve shows the trade off between 2 goods or services.
Q: Under free-trade conditions, suppose Australia imports TV sets at a price of $100 each. Determine…
A: A country imports a particular product only when the free trade price of the product is less than…
Q: wine SERE54321 90 80 70 60 50 40 30 20 10 PPF Portugal CPF 0 0 10 20 30 40 50 60 cloth wine 90…
A: PPF stands for Production Possibility Frontier, which is a graphical representation showing the…
Q: Who are the winners and losers of the free trade between two countries? Can free trade between the…
A: Comparative AdvantageComparative advantage refers to the principle that suggests countries should…
Q: Suppose two countries produce the same twogoods and have identical production…
A: Production possibilities frontiers are used to represent the trade-off that occurs between the…
Q: what accounts for the shape of the PPC? In other words, what is it about the relationship between…
A: The production possibility frontier (PPF) is a curve on a graph that delineates the potential…
Q: 4. Specialization and trade When a country has a comparative advantage in the production of a good,…
A: Trade based on comparative advantage leads to the efficient use of scarce resources.
Q: As you did for Shenandoah, place a black point (plus symbol) on the following graph to indicate…
A: Opportunity cost is the cost of producing one good in terms of anotheranother good. Opportunity cost…
Q: How does an open economy versus a closed economy impact government policy decisions?
A: There are two types of economies: 1. Open economy 2. Closed economy
Q: Maldonia Desonia 48 48 42 42 36 36 PPF 30 30 24 24 18 PPF 18 12 12 --- -- --- -- 6 6 12 18 24 30 36…
A: Without trade, a country consumption and production point remains the same but with trade,…
Q: Suppose an economist develops an international trade model based on the assumption that there are…
A: The Economist mostly considered only two countries and two goods for the better understanding of the…
Q: True or false? Briefly explain. “Free trade is beneficial because it rotates a country’s production…
A: Free-trade refers to the situation people of a country has freedom to make an exchange of goods and…
Q: Scroll down to "U.S. Trade in Goods and Services by Selected Countries and Areas, 1999 - Present"…
A: Goods, products, or services that are produced or provided within a country's borders and are sold…
Q: When a country has a comparative advantage in the production of a good, it means that it can produce…
A: To check which country has the comparative advantage in grain and tea, we have to calculate the…
Q: The following graph shows the same PPF for Denali as before, as well as its initial consumption at…
A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…
Q: It is often asserted that the United States no longer manufactures anything, and that instead it…
A: United States no longer manufactures anything Manufacturing in the United States is a vital sector.…
Q: Curve 2 represents a decrease in production possibilities. Identify two possible reasons for the…
A: The Production Possibility Curve (PPC) is a graphical representation of all the maximum possible…
Q: What could be a convincing argument for both? A. In the US today during the COVID crises, you…
A: The PPF shows the maximum amount of goods that can be produced in an economy with the given…
Q: Draw a new curve, on the same graph,reflecting what the PPC might look like if new production…
A: PPF refers to the curve on a graph that shows the possible units that can be produced of 2 products…
Q: On an overseas business trip you stop in Ukraine to meet with one of your primary suppliers to…
A: The IMF is a global organization which works for fostering the global monetary cooperation, securing…
Q: What type's of goods and services should the United States produce based on its comparative…
A: Comparative advantage refers to the production of goods and services at a lower opportunity cost…
Q: Before the technological change, point X was first box unattainable inefficient efficient second box…
A: Production possibility frontier shows all the combinations of the two goods that an economy can…
Q: Why does the United States not have an absolute advantage in coffee? Explain.
A: Absolute advantage refers to the efficiency of economy where a particular production can be produced…
Q: 4. Specialization and trade When a country has a comparative advantage in the production of a good,…
A: The concept of comparative advantage refers to a country's capacity to manufacture a product or…
Q: Suppose that Cambodia decides to become self-sufficient in bananas and even to export t In order to…
A: Comparative advantage: It refers to the nation's production of goods and services with the lowest…
Q: a comparative advantage in orange production. an absolute advantage in orange production. a…
A: Mexico can produce either 200 bushels of oranges per acre or 200 bushels of bananas per acre.…
Q: Labor Input to Produce Chairs and Tables Spain 1 Morocco 3 Chair Table 10 5
A: TRUE It can be concluded from the given schedule that Spain has a comparative advantage in the…
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- Use the following table for Country X to answer the next question. Column 1 of the table is the world-market price of a product, Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity supplied domestically (Qsd). Assume the small-country model is applicable. Price Qdd Qsd $5.00 200 400 4.00 250 350 3.00 300 300 2.00 350 250 1.00 400 200 If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will a. neither export nor import the product b. export some units of the product c. import some units of the product d. not produce the productConsider a region with two export products (gloves and socks) and two local goods (tattoos and manicures). The production of each export good is subject to localization economies, so each city specializes in one export good. According to Mr. Wizard, “If my two assumptions (one for export products and one for local goods) are correct, all the cities in the region will be the same size.” Assume that Mr. Wizard’s logic is correct. List his assumptions and explain why together they imply the region’s cities will be the same size.Consider the following dialogue between two economics students, Janet and Larry, after a recent economics lecture. JANET: Hi Larry. Today the professor said that money is helpful because systems of exchange work better when everyone agrees to use a single common item to buy and sell things. But I don’t see how money is useful. As long as I specialize in something I have a comparative advantage in, like making cookies, I should be able to trade my cookies for whatever I need! I wouldn't need money! LARRY: Okay, I see where you are confused. Let’s run through it one more time. Suppose there is no money and you continue your job making cookies. With no money, you will actually have to be paid in cookies. Now, you still need water to survive, right? Well, in order to get water, you'll need to pay the water company your _______ (options: cookies, water, cash) in exchange for the water company's _________ (options: cash, cookies, water). JANET: Yes. So what’s wrong with that?…
- The U.S. economy relies heavily on international trade. Choose two transactions at random that result from international trade; one where purchases are made from another country and one where the U.S. sends a product to another country. Identify the impact of each of these on imports, exports, net imports, and net exports at the time the transaction takes place. For example, if you purchase a product online that is made in and shipped from Italy to you in the United States what is the effect on the U.S. economy in these four categories at the time of the transaction? In addition, there has been a lot of news in recent years surrounding tariffs. Exactly what is a tariff and what is the impact of tariffs on international trade? Who pays the cost of tarffs?The graph shows the PPC for a country that can produce coffee or butter. Pounds of coffee (thousands) 123 4 5 6 7 8 Pounds of butter (thousands) The straight line is the trade line and CPC if production is at Point A. This country has a comparative advantage in butter. True FalseAs you did for Maldonia, place a black point (+ symbol) on the following graph to indicate Lamponia's consumption after trade. Lamponia 64 56 Consumption After Trade 48 40 32 24 PPF 16 16 24 32 40 48 56 64 LEMONS (Millions of pounds) True or False: Without engaging in international trade, Maldonia and Lamponia would not have been able to consume at the after-trade consumption bundles. (Hint: Base this question on the answers you previously entered on this page.) True False SUGAR (Millions of pounds)
- Why does the production possibility curve slopes downwards to right and why is it concave from the origin ?what are the advantages and disadvantages of open economies and closed economies? How has covid and other recent events with the supply chain impacted these types of economies?Why might it be argued that corporations do not have a comparative advantage when investing in real estate as means of diversification from core business?
- In the Heckscher-Ohlin model, suppose the two factors of production are: high-skilled labor (H) and regular labor (L). The two sectors are manufacturing and business services. Manufacturing uses regular labor more intensively, and business services uses high-skilled labor more intensively. The two countries are the U.S. and China, and the U.S. has a comparative advantage in business services. a. Illustrate the effect of opening up to trade on the U.S. with the PPF and indifference curve diagram. Make sure you clearly label everything. What happens to the relative price of business services in the U.S.? Show clearly the gains from trade. b. What happens to the relative wage of high-skilled labor? Does inequality (the skill premium) increase? Show all work and explain. 2. Evidence for or against Heckscher-Ohlin model Leontieff Paradox i. Briefly describe the paradoxii.We discussed several explanations for the paradoxical result in class. Briefly describe two explanations. Inequality…Use the following table for Country X to answer the next question. Column 1 of the table is the world-market price of a product, Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity supplied domestically (Qsd). Assume the small-country model is applicable. Price Qdd Qsd $5.00 200 400 4.00 250 350 300 250 200 3.00 300 2.00 350 1.00 400 If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will Multiple Choice O neither export nor import the product. export some units of the product. import some units of the product. not produce the product.Opponents of free trade zones might use this map to argue which of the following points?
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