Homework (Ch 03)In the following table, enter each country's production decision on the third row of the table (marked "Production").Suppose the country that produces corn trades 18 million bushels of corn to the other country in exchange for 54 million pairs of jeans.In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," andenter each country's final consumption of each good on the line marked "Consumption."When the two countries did not specialize, the total production of corn was 23 million bushels per week, and the total production of jeans was 68million bushels per week, and the totalmillion pairs per week. Because of specialization, the total production of corn has increased byproduction of jeans has increased bymillion pairs per week.Because the two countries produce more corn and more jeans under specialization, each country is able to gain from trade.Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of thetable. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").DoloriumBellissimaCornJeansCornJeans(Millions of bushels)(Millions of pairs) (Millions of bushels)(Millions of pairs)Without TradeGO O (Ch 03)HomeworkConsider two neighboring island countries called Dolorium and Bellissima. They each have 4 million labor hours available per week that they can use toproduce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor.CornJeansCountry(Bushels per hour of labor) (Pairs per hour of labor)Dolorium520Bellissima816Initially, suppose Bellissima uses 1 million hours of labor per week to produce corn and 3 million hours per week to produce jeans, while Dolorium uses3 million hours of labor per week to produce corn and 1 million hours per week to produce jeans. Consequently, Dolorium produces 15 million bushelsof corn and 20 million pairs of jeans, and Bellissima produces 8 million bushels of corn and 48 million pairs of jeans. Assume there are no othercountries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of corn and jeans itproduces.Dolorium's opportunity cost of producing 1 bushel of corn isof jeans. Therefore,of jeans, and Bellissima's opportunity cost of producing 1 bushel of corn ishas a comparativehas a comparative advantage in the production of corn, andadvantage in the production of jeans.Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. Inmillion bushels per week, and the country that produces jeans will producethis case, the country that produces corn will produceHGOARTO CAVAYALAYSIA

A country or an individual is said to have a comparative advantage in a good if it can produce the…

Homework (Ch 03) In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces corn trades 18 million bushels of corn to the other country in exchange for 54 million pairs of jeans. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," an enter each country's final consumption of each good on the line marked "Consumption." When the two countries did not specialize, the total production of corn was 23 million bushels per week, and the total production of jeans was 68 million bushels per week, and the total million pairs per week. Because of specialization, the total production of corn has increased by production of jeans has increased by million pairs per week. Because the two countries produce more corn and more jeans under specialization, each country is able to gain from trade. Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Dolorium Bellissima Corn Jeans Corn Jeans (Millions of bushels) (Millions of pairs) (Millions of bushels) (Millions of pairs) Without Trade O

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC