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 ofrye 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 countrieswilling 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 isv has a comparativeContente's opportunity cost of producing 1 bushel of rye isv of jeans. Therefore,advantage in the production of jeans.v has a comparative advantage in the production of rye, andSuppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. Inthis case, the country that produces rye will producemillion bushels per week, and the country that produces jeans will producemillion 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, "andenter 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 104million pairs per week. Because of specialization, the total production of rye has increased byproduction of jeans has increased bymillion bushels per week, and the totalmillion 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 thetable. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").ContenteEuphoriaRyeJeansRye(Millions of pairs) (Millions of bushels) (Millions of pairs)Jeans(Millions of bushels)Without TradeProduction12722432Consumption12722432With TradeProductionTrade actionConsumptionGains from TradeIncrease in ConsumptionType here to search 3. Gains from tradeConsider two neighboring island countries called Contente and Euphoria. They each have 4 million labor hours available per week that they can use toproduce 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.RyeJeansCountry(Bushels per hour of labor) (Pairs per hour of labor)Contente1224Euphoria32Initially, 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 3million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Contente produces 12 million bushels ofrye 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 countrieswilling 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 isv of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye isv of jeans. Therefore,v has a comparative advantage in the production of rye, andhas a comparativeadvantage 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. Inthis case, the country that produces rye will producemillion bushels per week, and the country that produces jeans will producemillion 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, "andenter 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 104million pairs per week. Because of specialization, the total production of rye has increased bymillion bushels per week, and the totalproduction of jeans has increased bymillion 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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Answered: The first fill in the blank options are…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC