Consider two neighboring island countries called Contente and Dolorium. They each have 4 million labor hours available per month that they can useto produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor.JeansRyeCountry(Pairs per hour of labor)(Bushels per hour of labor)Contente816Dolorium5.20Initially, suppose Contente uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce rye, while Doloriumuses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce rye. Consequently, Contente produces 8 millionpairs of jeans and 48 million bushels of rye, and Dolorium produces 15 million pairs of jeans and 20 million bushels of rye. 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 jeans and rye itproduces. In the following table, enter each country's production decision on the third row of the table (marked "Production").Suppose the country that produces jeans trades 18 million pairs of jeans to the other country in exchange for 54 million bushels of rye.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 jeans was 23 million pairs per month, and the total production of rye was 68 millionbushels per month. Because of specialization, the total production of jeans has increased bymillion pairs per month, and the total productionof rye has increased bymillion bushels per month.Because the two countries produce more jeans and more rye under specialization, each country is able to gain from trade.Calsuleta t

In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces jeans trades 18 million pairs of jeans to the other country in exchange for 54 million bushels of rye. 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," and 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 jeans was 23 million pairs per month, and the total production of rye was 68 million bushels per month. Because of specialization, the total production of jeans has increased by million pairs per month, and the total production of rye has increased by million bushels per month. Because the two countries produce more jeans and more rye under specialization, each country is able to gain from trade.

In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces jeans trades 18 million pairs of jeans to the other country in exchange for 54 million bushels of rye. 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," and 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 jeans was 23 million pairs per month, and the total production of rye was 68 million bushels per month. Because of specialization, the total production of jeans has increased by million pairs per month, and the total production of rye has increased by million bushels per month. Because the two countries produce more jeans and more rye under specialization, each country is able to gain from trade.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider two countries, Home and Foreign. In the figure below, the import demand ("IDHome") curve depicts Home's demand for Foreign's flash drives, and the import supply curve ("ISForeign") depicts Foreign's supply of flash drives to Home. Assume Home is a "large" country that levies a tariff against Foreign imports of flash drives, thereby shifting the relevant supply curve from ISForeign to ISForeign +t. For the following questions, please refer to the figure below. P $30 28 26 24 22 20 18 16 15-- 14 12 10 8 6 4 2 0 2 4 ISForeign +t 6 8 10 12 14 16 18 20 22 22 24 26 28 ISForeign IDHome 30 Q With free trade, Home's consumer surplus equals $112.50 and Foreign's producer surplus equals $112.50. With a tariff of $ 12 per flash drive, Home's consumer surplus equals $72, Foreign's producer surplus equals $ 36, Home's tariff revenue equals $72, and Home's deadweight loss equals $45. Of the Home's tariff revenue, $36 comes from Foreign's producers, and the rest comes from Home's consumers.…
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?
3. Gains from trade Suppose there exist two imaginary countries, Glacier and Everglades. Their labor forces are each capable of supplying four million hours per week that can be used to produce shorts, almonds, or some combination of the two. The following table shows the amount of shorts or almonds that can be produced by one hour of labor. Country Glacier Everglades Shorts Almonds (Pairs per hour of labor) (Pounds per hour of labor) 8 16 5 20 Suppose that initially Glacier uses 1 million hours of labor per week to produce shorts and 3 million hours per week to produce almonds, while Everglades uses 3 million hours of labor per week to produce shorts and 1 million hours per week to produce almonds. As a result, Glacier produces 8 million pairs of shorts and 48 million pounds of almonds, and Everglades produces 15 million pairs of shorts and 20 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two…
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," and Activity Frame 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 pistachios was 23 million pounds per week, and the total production of chinos was 68 million pairs per week. Because of specialization, the total production of pistachios has increased by million pounds per week, and the total production of chinos has increased by million pairs per week. Because the two countries produce more pistachios and more chinos 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 the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in…
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 False
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,” and 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 jeans was 36 million pairs per week, and the total production of corn was 104 million bushels per week. Because of specialization, the total production of jeans has increased by ______________million pairs per week, and the total production of corn has increased by ______________million bushels per week. Because the two countries produce more jeans and more corn 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 the table. In the following table, enter this difference in the boxes across the last row (marked “Increase in…
Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? Question 35 options: Georgeland has a comparative advantage, but not an absolute advantage, in producing clothing. Georgeland has both a comparative and absolute advantage in producing clothing. Alland has a comparative advantage, but not an absolute advantage, in producing food. Alland has an absolute advantage, but not comparative advantage, in producing food.
As 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)
The graph below shows the PPC for a country that can produce oil and television. Oil is labor intensive, and televisions are capital intensive. The country is currently producing at point A and not trading with the rest of the world. With trade, the world price can be represented by the slope of the straight line through Point A. Which of the following is a TRUE statement? 6 7 8 9 Barrels of oil O A. When this country produces the optimal amount with trade, the income factors of production will not change. OB. When this country produces the optimal amount with trade, both factors of production will be better off. O C. When this country produces the optimal amount with trade, capital in this country will be better off. O D. When this country produces the optimal amount with trade, workers in this country will be better off.
In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces jeans trades 18 million pairs of jeans to the other country in exchange for 54 million bushels of corn. 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," and 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 jeans was 23 million pairs per week, and the total production of corn was 68 million bushels per week. Because of specialization, the total production of jeans has increased by million pairs per week, and the total production of corn has increased by million bushels per week. Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade. Calculate the gains from trade-that is, the…
Say that Alland can produce 24 units of food per person per year or 6 units of clothing per person per year, but Georgeland can produce 36 units of food per year or 6 units of clothing. Which of the following is true? Georgeland has a comparative advantage, but not an absolute advantage, in producing food. Georgeland has both a comparative and absolute advantage in producing food. Alland has both absolute advantage and comparative advantage, in producing food.
When China's clothing industry expands, the increase in world supply lowers the world price of clothing. Consider the effects this has on both an importer and an exporter of clothing. Suppose the following graph represents the market for clothing in Cambodia prior to the expansion of China's clothing industry. Cambodia is an of clothing because the world price is the domestic equilibrium price. Note: You will have to use green points (triangle symbol) and purple points (diamond symbol) to shade the consumer and producer surplus areas on the following graphs. There are two green points and two purple points per graph. Use either one point of both to most accurately indicate the areas. For example, if indicating the consumer surplus requires only one green point, leave the second one on the palette. Use the green point (triangle symbol) to shade consumer surplus in Cambodia before China's clothing industry expands. Then use the purple point (diamond symbol) to shade…