The first fill in the blank options are (1/2 pair, 1/4 pair, 2 pairs, 4 pairs) The second fill in the blank is the same options as the first The third fill in the blank is ( euphoria or contente) and the fourth is the same The rest of the blanks should be numbers For the chart trade action The first blank option is (export 26 or import 26) the second is (export 78 or imports 78) the third is exports 26 or imports 26) and the fourth is (exports 78 or imports 78) around the chart the blank boxes should be numbers

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The first fill in the blank options are (1/2 pair, 1/4 pair, 2 pairs, 4 pairs) The second fill in the blank is the same options as the first The third fill in the blank is ( euphoria or contente) and the fourth is the same The rest of the blanks should be numbers For the chart trade action The first blank option is (export 26 or import 26) the second is (export 78 or imports 78) the third is exports 26 or imports 26) and the fourth is (exports 78 or imports 78) around the chart the blank boxes should be numbers
million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Contente produces 12 million bushels of
rye and 72 million pairs of jeans, and Euphoria produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries
willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces.
v of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is
v has a comparative
Contente's opportunity cost of producing 1 bushel of rye is
v of jeans. Therefore,
advantage in the production of jeans.
v has a comparative advantage in the production of rye, and
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 rye will produce
million bushels per week, and the country that produces jeans will produce
million pairs per week.
In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for 78 million pairs of jeans.
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 rye was 36 million bushels per week, and the total production of jeans was 104
million pairs per week. Because of specialization, the total production of rye has increased by
production of jeans has increased by
million bushels per week, and the total
million pairs per week.
Because the two countries produce more rye and more jeans 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 Consumption").
Contente
Euphoria
Rye
Jeans
Rye
(Millions of pairs) (Millions of bushels) (Millions of pairs)
Jeans
(Millions of bushels)
Without Trade
Production
12
72
24
32
Consumption
12
72
24
32
With Trade
Production
Trade action
Consumption
Gains from Trade
Increase in Consumption
Type here to search
Transcribed Image Text:million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Contente produces 12 million bushels of rye and 72 million pairs of jeans, and Euphoria produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. v of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is v has a comparative Contente's opportunity cost of producing 1 bushel of rye is v of jeans. Therefore, advantage in the production of jeans. v has a comparative advantage in the production of rye, and 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 rye will produce million bushels per week, and the country that produces jeans will produce million pairs per week. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for 78 million pairs of jeans. 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 rye was 36 million bushels per week, and the total production of jeans was 104 million pairs per week. Because of specialization, the total production of rye has increased by production of jeans has increased by million bushels per week, and the total million pairs per week. Because the two countries produce more rye and more jeans 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 Consumption"). Contente Euphoria Rye Jeans Rye (Millions of pairs) (Millions of bushels) (Millions of pairs) Jeans (Millions of bushels) Without Trade Production 12 72 24 32 Consumption 12 72 24 32 With Trade Production Trade action Consumption Gains from Trade Increase in Consumption Type here to search
3. Gains from trade
Consider two neighboring island countries called Contente and Euphoria. They each have 4 million labor hours available per week that they can use to
produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor.
Rye
Jeans
Country
(Bushels per hour of labor) (Pairs per hour of labor)
Contente
12
24
Euphoria
32
Initially, suppose Contente uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3
million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Contente produces 12 million bushels of
rye and 72 million pairs of jeans, and Euphoria produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries
willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces.
Contente's opportunity cost of producing 1 bushel of rye is
v of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is
v of jeans. Therefore,
v has a comparative advantage in the production of rye, and
has a comparative
advantage in the production of jeans.
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 rye will produce
million bushels per week, and the country that produces jeans will produce
million pairs per week.
In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for 78 million pairs of jeans.
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 rye was 36 million bushels per week, and the total production of jeans was 104
million pairs per week. Because of specialization, the total production of rye has increased by
million bushels per week, and the total
production of jeans has increased by
million pairs per week.
Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.
Transcribed Image Text:3. Gains from trade Consider two neighboring island countries called Contente and Euphoria. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Rye Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) Contente 12 24 Euphoria 32 Initially, suppose Contente uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Contente produces 12 million bushels of rye and 72 million pairs of jeans, and Euphoria produces 24 million bushels of rye and 32 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. Contente's opportunity cost of producing 1 bushel of rye is v of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is v of jeans. Therefore, v has a comparative advantage in the production of rye, and has a comparative advantage in the production of jeans. 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 rye will produce million bushels per week, and the country that produces jeans will produce million pairs per week. In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces rye trades 26 million bushels of rye to the other country in exchange for 78 million pairs of jeans. 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 rye was 36 million bushels per week, and the total production of jeans was 104 million pairs per week. Because of specialization, the total production of rye has increased by million bushels per week, and the total production of jeans has increased by million pairs per week. Because the two countries produce more rye and more jeans under specialization, each country is able to gain from trade.
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