Suppose that Greece and Sweden both produce fish and shoes. Greece's opportunity cost of producing a pair of shoes is 5 pounds of fish while Sweden's opportunity cost of producing a pair of shoes is 10 pounds of fish. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the production of shoes and has a comparative advantage in the production of fish. Suppose that Greece and Sweden consider trading shoes and fish with each other. Greece can gain from specialization and trade as long as it receives more than of shoes it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than of fish for each pair of shoes for each pound of fish it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of fish) would allow both Sweden and Greece to gain from trade? Check all that apply. 11 pounds of fish per pair of shoes 6 pounds of fish per pair of shoes 4 pounds of fish per pair of shoes 7 pounds of fish per pair of shoes

Suppose that Greece and Sweden both produce fish and shoes. Greece's opportunity cost of producing a pair of shoes is 5 pounds of fish while Sweden's opportunity cost of producing a pair of shoes is 10 pounds of fish. By comparing the opportunity cost of producing shoes in the two countries, you can tell that has a comparative advantage in the production of shoes and has a comparative advantage in the production of fish. Suppose that Greece and Sweden consider trading shoes and fish with each other. Greece can gain from specialization and trade as long as it receives more than of shoes it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than of fish for each pair of shoes for each pound of fish it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of fish) would allow both Sweden and Greece to gain from trade? Check all that apply. 11 pounds of fish per pair of shoes 6 pounds of fish per pair of shoes 4 pounds of fish per pair of shoes 7 pounds of fish per pair of shoes

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

Germany Production Possibilities (Production Alternatives) Product A B C D E F Autos 0 4 8 12 16 20 Chemicals 40 32 24 16 8 0 U.S. Production Possibilities (Production Alternatives) Product A B C D E F Autos 0 3 6 9 12 15 Chemicals 60 48 36 24 12 0 Refer to the accompanying production possibilities tables. Data are in millions of units. Suppose that each nation specialized in producing the product for which it has a comparative advantage and the terms of trade were set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum combination of 8 million units of autos and Multiple Choice 12 million units of chemicals. 24 million units of chemicals. 36 million units of chemicals. 48 million units of chemicals.
Use the following data to explain the difference between absolute advantage (SMITH) and comparative advantage (Ricardo) and to determine whether these two nations should specialize trade. If they should, determine which should specialize in which good and why. What would be the "gains from trade'? ExplainNation A -(Wheat: 1) (Shoes: 1) (output per worker)Nation B -(Wheat: 4) (Shoes: 8) (output per worker)
China and Thailand jointly produce and efficiently trade tea and noodles. China has a comparative advantage in the production of tea, while Thailand has a comparative advantage in the production of noodles. Their joint PPF is given below: tea 70 35 70 110 noodles Assume that they jointly produce 50 units of tea and 40 units of noodles. Then: China produces units of tea. China produces units of noodles. Thailand produces units of tea.
If each country specializes in the good in which it has a comparative advantage,....will gain from that trade because
Suppose that Bob and Jimmy both have 10 hours of time that they can use to do one of two things: make pasta or make hamburgers. Bob can make 15 hamburgers in one hour and 3 plates of pasta in one hour. Jimmy can make 8 hamburgers in one hour and 2 plates of pasta in one hour. Who has comparative in the production of hamburgers? Who has comparative advantage in the production of pasta? If Bob and Jimmy trade, who should specialize in producing hamburgers and who should specialize in producing pancakes? Give an example of terms of trade at which mutually beneficial trade would be possible between Bob and Jimmy.
The countries of Sanaton and Microtania each produce two goods: Airplanes and Computers. The table below lists the opportunity costs associated with producing each good, for each country. Country Opportunity cost of producing 1 Airplanes Opportunity cost of producing 1 Computers Sanaton 4 Computers 0.25 Airplanes 2 Airplanes Microtania 0.5 Computers Currently, Sanaton does not trade with Microtania, and on its own produces 19 Airplanes and 24 Computers. On their own, Microtania produces 30 Airplanes and 35 Computers. Calculate total world supply: Airplanes: → Computers: If Sanaton decided to change its production of Airplanes by -2, calculate the change in the production of Computers: If Microtania changed its production of Airplanes by 8, calculate the change in production of Computers: A
Which country had an absolute advantage in the production of Machines? Calculate and explain which country has a comparative advantage in the production of Machines and Cloth.
The table suggests that Italy has an absolute advantage over Romania in (footweat, neither product, both products, beef) and a comparative advantage in (footweat, neither product, both products, beef). The table suggests that wages in Italy are (the sameas, higher than, lower than) in Romania. As a result of Romania’s joining the EU, employment in Romania is likely to fall in (the footwear industry, neither industry, both industries, the beef industry) . True or False: The degree of openness of the Romanian economy will not influence the mix of jobs. a)True b)False
The following table shows how many tonnes of dairy products and beef products can be produced in Country 1 and Country 2 with one unit of equivalent resources. Country 1 Country 2 Dairy Products (tonnes) 15 15 Beef Products (tonnes) 5 25 ..... a. Which country has an absolute advantage in dairy products? In beef products? Explain. Whoever is able to produce absolute advantage of producing that product. advantage in dairy production. production. with the same amount of resources has the has the absolute has the absolute advantage in beef A *****
Consider the following information: Country A's opportunity cost of producing vegetables is lower than Country B's. Country B's opportunity cost of producing electronics is lower than Country A's. Country A is absolutely better at producing both goods. If the two countries decide to specialize and trade then: O Each country will be able to produce and consume at a point outside their production possibilities frontier. O Each country will be able to consume at a point outside their production possibilities frontier. O Each country will be able to produce at a point outside their production possibilities frontier. O Each country's production possibilities frontier will shift outward. « Previous Next ASUS 17 6 8
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces pistachios will produce. million pounds per day and the country that produces chinos will produce million pairs per day.
Suppose that Slovenia and Wales both produce olive oil and broccoli. Slovenia's opportunity cost of producing a bushel of broccoli is 4 crates of olive oil while Wales's opportunity cost of producing a bushel of broccoli is 12 crates of olive oil. By comparing the opportunity cost of producing broccoli in the two countries, you can tell that production of broccoli and has a comparative advantage in the production of olive oil. has a comparative advantage in the Suppose that Slovenia and Wales consider trading broccoli and olive oil with each other. Slovenia can gain from specialization and trade as long as it receives more than of olive oil for each bushel of broccoli it exports to Wales. Similarly, Wales can gain from trade as long as it of broccoli for each crate of olive oil it exports to Slovenia. receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of broccoli in terms of olive oil) would allow both Wales and Slovenia…