Steel (millions of tons) 20 10 0 Country A Production possibilition curve 10 20 30 40 Chemicale (millions of tons) From the diagrams, it can be seen that 50 Steel (millions of tons) 40 30 20 10- 0 Country B Production possibilities curve 10 20 30 40 Chemicals (millions of tons) O the slopes of the two curves indicate both countries will specialize in chemicals. country B has an absolute advantage in both commodities. O it is more costly in terms of resources to produce steel in country A. O country B has a comparative advantage in chemicals. country A has a comparative advantage in both commodities. 50

Steel (millions of tons) 20 10 0 Country A Production possibilition curve 10 20 30 40 Chemicale (millions of tons) From the diagrams, it can be seen that 50 Steel (millions of tons) 40 30 20 10- 0 Country B Production possibilities curve 10 20 30 40 Chemicals (millions of tons) O the slopes of the two curves indicate both countries will specialize in chemicals. country B has an absolute advantage in both commodities. O it is more costly in terms of resources to produce steel in country A. O country B has a comparative advantage in chemicals. country A has a comparative advantage in both commodities. 50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons. Gamma's production possibilities A B C D E Tea 120 90 60 30 0 Pots 0 30 60 90 120 Sigma's production possibilities A B C D E Tea 40 30 20 10 0 Pots 0 30 60 90 120 Assume that before specialization and trade, Gamma and Sigma both chose production possibility "C." Now if each specializes according to comparative advantage, the gains from specialization and trade will be Multiple Choice 40 tons of pots. 20 tons of tea and 20 tons of pots. 20 tons of tea. 40 tons of tea.
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Which of the following is NOT a benefit from trade? O a. the ability to specialize O b. an increase in the variety of goods and services available O c. reduced competition O d. lower prices
Suppose equilibrium in the market for strawberries is disturbed by two simultaneous events: a wildfıre destroys many acres of coastal land used to plant strawberries, and blueberries (a substitute for strawberries) experience a large price increase. What would we expect to happen in the market for strawberries? The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. The equilibrium quantity would decrease, and the equilibrium price would increase. O The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. The equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. Both equilibrium price and equilibrium quantity would decrease.
Which of the following is true about BRIC countries: a. There is low prospects of growth O b. To attain raw materials you will outsource to Bangladesh O c. There is low investment O d. There are high growth rates which may not be seen in North America Google is pursuing a global brand web strategy and must be mindful of the cultural and language differences across countries. Select one: O True O False occurs when a company exports to a foreign market at a price that is either lower than the domestic prices in that country or less than the cost of production.
Meagan, a contractor, is hired to install cabinets in a new home and has to decide whether to build the cabinets herself or purchase them from a local cabinet shop. a. Meagan should build the cabinets herself only if the cabinet maker has a comparative advantage in the production of cabinets. -she has a comparative advantage in the production of cabinets. -she has an absolute advantage in the production of cabinets. -the cabinet maker has an absolute advantage in the production of cabinets. b. If the cabinet maker is foreign rather than local, the answer to part a -does change regardless of trade costs. -does not change regardless of trade costs. -does change as long as trade costs are negligible. -does not change as long as trade costs are negligible.
01 20 wered For each fancy dress Cafilla produces, it gives up the opportunity to make 50 pounds of cheese. Bodoni can produce one fancy dress for every 100 pounds of cheese it produces. If specialization and trade were to occur between these two countries, which of the following would be consistent with the theory of comparative advantage? O a. Bodoni has the comparative advantage in only dresses. O b. Cafilla has the comparative advantage in only cheese. O c. Cafilla has the comparative advantage in only dresses. O d. Bodoni has the comparative advantage in dresses and cheese. O e. Cafilla has the comparative advantage in dresses and cheese. D AssignmentMain.do?takeAssignmentSession Locator assignment-take,0896c4f4-0518-431a-b10a-1cd73a8289c4# Show -9 bike 2 bike jpg.jpg bike 2.jpg T ▬▬ 6:5 6/12/2 ➡+ prt so R % 5 L G B O Y I & 7 x 8 l J C IAA 00 M 9 K fio ► 11 O ENG S D
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Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Cheese (Pounds) 16 Wine (Bottles) Cheese (Pounds) 12 8. 4. 25 20 15 2 3 3 4 10 4 Who has the comparative advantage in producing wine and who has the comparative advantage in producing cheese? O A. France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese. O B. France has a comparative advantage producing wine and cheese. OC. Germany has a comparative advantage producing wine and cheese. -OD. Neither has a comparative advantage producing wine or cheese. OE. France has a comparative advantage producing cheese and Germany has a comparative advantage producing wine. Suppose that France is currently producing 1 bottle of wine and 12 pounds of cheese and Germany is currently producing 3 bottles of wine and 10 pounds of cheese. Then, assume instead that France and…
Figure 2-9 Snow cones 240 0 Greenland 200 Popsicles Snow cones 270 0 Iceland O 100 popsicles & 130 snow cones; 100 popsicles & 140 snow scones O 100 popsicles & 140 snow cones; 100 popsicles & 100 snow scones O 140 popsicles & 120 snow cones; 100 popsicles & 130 snow scones none of the above. 180 Popsicles Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and popsicles. With the opening of international trade, the agreed price between Iceland and Greenland for popsicles is 1.3. Assume that the country which now imports popsicles (with int'l trade) decides that it will import 100 units of popsicles. The new consumption bundles/points after international trade for Greenland and Iceland, respectively, are?
Suppose Italy has the comparative advantage in producing wine and Germany has the comparative advantage in producing machine tools. Suppose further that each country produces both goods when operating in autarky. When the countries move from autarky to mutually beneficial trade, profits in the German machine tool industry will ,everything else held constant. Select one: O A. decrease O B. be ambiguous O C. remain unchanged D. increase
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