Suppose that two countries can produce wheat or cotton. If country A produces only wheat it can produce 38 units of wheat, and if it only produces cotton it can produce 45 units of cotton. If country B produces only wheat it can produce 27 units of wheat, and if it only produces cotton it can produce 35 units of cotton. Given the production possibilities frontiers above which of the following would be feasible terms of trade between country A and country B? O a. One unit of cotton for 0.92 units of wheat. O b. One unit of cotton for 0.72 units of wheat. O c. One unit of wheat for 1.08 units of cotton. O d. One unit of wheat for 1.35 units of cotton. O e. None of the other answers are feasible terms of trade.

Suppose that two countries can produce wheat or cotton. If country A produces only wheat it can produce 38 units of wheat, and if it only produces cotton it can produce 45 units of cotton. If country B produces only wheat it can produce 27 units of wheat, and if it only produces cotton it can produce 35 units of cotton. Given the production possibilities frontiers above which of the following would be feasible terms of trade between country A and country B? O a. One unit of cotton for 0.92 units of wheat. O b. One unit of cotton for 0.72 units of wheat. O c. One unit of wheat for 1.08 units of cotton. O d. One unit of wheat for 1.35 units of cotton. O e. None of the other answers are feasible terms of 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

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?
If China can produce cars at a lower cost than America using all Chinese-made parts, it has a comparative advantage rather than an absolute advantage. O True False
Need help
? Q 5. The price of trade Suppose that Hungary and Luxembourg both produce boo and shoes. Hungary's opportunity cost of producing a pair shoes is 4 pairs of boots while Luxembourg's opportunity cost of producing a pair of shoes is 12 pairs of boots. By comparing the opportunity cost of producing shoes in t two countries, you can tell that has a comparative has a A+ advantage in the production of shoes and comparative advantage in the production of boots. Suppose that Hungary and Luxembourg consider trading shoes and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each pair of shoes it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it receives more than of shoes for each pair of boots it exports to Hungary. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of boots) would allow both Luxembourg and Hungary to gain from trade?…
N3
Suppose there are three countries in the world: Portlandia, Sanaton, and Volcania. These three countries produce a total of 3 different kinds of goods: Raspberries, Pomegranates, and Grapefruits. If Portlandia imposes some protectionist measures on Raspberries from Sanaton, and Volcania. OThe price of Raspberries in Portlandia will increase for everyone OThe Raspberries industry in Volcania will benefit OThe Raspberries in Sanaton will be the only one to see higher prices for this product
↳ A Click Submit to complete this assessment. Question 33 What insights do welfare analysis (consumer surplus/producer surplus) offer into international trade? O a. That trade increases the welfare of producers, so trade may make total surplus fall. O b. That tariffs make a country better off and trade wars can definitely be won! Oc. That nations are better off NOT trading with each other, because lower world prices harm most nations' producers and consumers. Od. That while trade increases total surplus, consumers or producers in a country may gain or lose, depending on world price. A Click Submit to complete this assessment. tab caps lock shift fn 1 Q 2 A W Z I 3 S E X S D R C F T V G H B J N K
Sovle it
Suppose that France and Italy both produce wine and cheese. France's opportunity cost of producing a case of cheese is 5 barrels of wine, while Italy's opportunity cost of producing a case of cheese is 10 barrels of wine. By comparing the opportunity cost of producing cheese in the two countries, you can tell that comparative advantage in the production of cheese and has a comparative advantage in the production of wine. Suppose that France and Italy consider trading cheese and wine. France can gain from specialization and trade as long as it receives more than of wine for each case of cheese it exports to Italy. Similarly, Italy can gain from trade as long as it receives of cheese for each barrel of wine it exports to France. more than Based on your answer to the last question, a price ratio between benefit both countries. has a barrels of wine per case of cheese will
According to the resource-based view, there are economic gains from international trade because some firms in one nation generate exports that are valuable, unique, and hard to imitate that firms from other nations find it beneficial to import. O True O False
The graphs below show domestic supply and demand curves for a good in two countries, with prices measured in the same currency. If these are the only two countries in the world and if they open to free international trade, O. Demanders of the good in Country A will benefit from trade. O. Suppliers of the good in Country A will benefit from trade. O. The welfare of Country A as a whole will fall. O. The quantity of the good demanded in Country B will become larger. O. The price of the good in both countries will be the one labeled PB.