Perry's Production Possibilities Frontier 20 99 18+ 16- 14 12 10 8 novels Jordan's Production Possibilities Frontier poems 20 18+ 16- 10. 8 14+ 12 S novels 14. Refer to Figure 2. Which of the following is not correct? a. Perry and Jordan could each consume 2 novels and 6 poems without trade. 3 b. Jordan could consume 2 novels and 6 poems both with and without trade. c. Perry and Jordan could each consume 2 novels and 6 poems with trade. d. Perry and Jordan could each consume 12 poems without trade.

Perry's Production Possibilities Frontier 20 99 18+ 16- 14 12 10 8 novels Jordan's Production Possibilities Frontier poems 20 18+ 16- 10. 8 14+ 12 S novels 14. Refer to Figure 2. Which of the following is not correct? a. Perry and Jordan could each consume 2 novels and 6 poems without trade. 3 b. Jordan could consume 2 novels and 6 poems both with and without trade. c. Perry and Jordan could each consume 2 novels and 6 poems with trade. d. Perry and Jordan could each consume 12 poems without trade.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter33: International Trade

Section: Chapter Questions

Problem 1QP

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Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
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Countries A and B currently consume 400 units of food and 400 units of textiles each and currently do not trade with one another. The citizens of country A have to give up one unit of food to gain two units of textiles, while the citizens of country B have to give up one unit of textiles to gain two uni food. Their production possibilities curves are shown. textiles 1200 Cauntry A Slopedf 2 line 600 400 Country B Slopeof line To200 400 600 Under the theory of comparative advantage: O a. The citizens of country A should make textiles and trade with the citizens of country B for food. Ob. There are no gains from trade in this example. O. The citizens of country A should make food and trade with the citizens of country B for textiles. O d. A is twice as good as B at making food and B is twice as good as A at making textiles.
Elif can produce 6 pies or 30 cakes in 1 hour. Ahmet can produce 10 pies or 20 cakes in 1hour A) What is the opportunity cost of producing cakes for Elif? What is the opportunitycost of producing cakes for Ahmet?B) Who has a comparative advantage in producing pies and who has a comparativeadvantage in producing cakes?C) On the PPF lines, show what Elif produces and what Ahmet produces when theyspecialize.D) Suppose that they set the exchange price as 1 Pie = 3 Cakes. If they specialize andtrade, show an exchange situation that is beneficial for both (compared to thesituation you found at part (b))?F) What is the minimum and maximum exchange price they could have determined foran exchange that will be beneficial for both of them?
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1. PPF and CPF Josel's PPF is defined by Qosel F Josel and Kayla can produce food and luxury goods. Kayla 12-3Qosel and Kayla's PPF is defined by Qa 12 - 3Q Kayla Suppose that Josel and Kayla trade with each other (i.e., no outside merchants). Kayla and Josel agree to trade under the following conditions: 1) the terms of trade are 1 unit of food in exchange for 1 unit of luxury goods; 2) each specializes according to his/her comparative advantage; and 3) Kayla consumes 3 units of the good she produces. (a) = Sketch on two different graphs (one for Josel and one for Kayla) the individual PPFs, the individual CPFs, and indicate the individual points of pro- duction and the individual points of consumption. Clearly label your graphs (i.e., indicate values for slopes, intercepts, points of production, and points of consump- tion).
Opportunity Cost and the Gains from Specializ PPF Review Problems What is the opportunity cost of an extra calculator for Smith? What is the opportunity cost of an extra calculator for Jones? Who has the absolute advantage in computer production? Who has the absolute advantage in calculator production? Who has the comparative advantage in calculator production? Who has the comparative advantage in computer production? Jones 6 120
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Suppose that Canada produces only lumber and fish. It has 18 million workers, each of whom can cut 10 feet of lumber or catch 20 fish daily. What is the maximum amount of lumber Canada could produce daily? What is the maximum amount of fish Canada could produce daily? Draw Canada’s production possibilities frontier.
Refer to Figure 3-8. If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of coffee and soybeans could Chile and Colombia together make in a given day?
The graph shows the Production Possibility Frontiers of Writ (orange, dotted line) and Greg (green, solid line) when they gather pumpkins or branches individually. Drag and drop the points A, B and C to form the Production Possibility Frontier when Wirt and Greg specialize and exchange the production of branches and pumpkins. Note: Use the circle in the top, left corner of the textbox as the point. Drab Point A as the top left point. Drag Point B to the point at which the joint PPF changes slope. Drag Point C to the bottom right point. Total Branches 6 5 4 3 2 1 O 0 1 2 3 4 5 6 Point A Point B Point C Greg's PPF Wirt's PPF Total Pumpkins
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