Two countries, A and B, that differ in their opportunity costs for the goods each one of them produces have decided to engage in trade. There is A. a unique trading ratio of these two goods that will benefit both countries. B. a unique trading ratio at which Country A will have gains from trade, but Country B will not. C. a range of trading ratios that lies between the opportunity costs of each good for both countries at which both countries will benefit from trade. D. a unique trading ratio at which Country B will have gains from trade, but Country A will not. E. a range of trading ratios that provides gains from trade only to Country A.

The countries get involved in trade with each other as it opens up wider markets for both the…

Answered: Two countries, A and B, that differ in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Because of conflict and instability in Country X, millions of its citizens emigrate to Country Y. Which of the following best explains what will happen to Country Y's production possibilities curve (PPC)? A C E It will move to a point on its PPC at which it produces only consumer goods B It's PPC will not change, but consumption of goods will decrease Its PPC will shift outward over time-- D It will move to a point inside its PPC, indicating slower growth Its PPC will shift inward over time
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(g) Explain how is the production structure (i.e. which goods are produced) affected in each country by opening up to trade. Is this consistent with the empirical evidence we observe in reality? How can this model be modified to produce a less stark result?
If a country closes off to trade and notices that the number of firms in an industry doubles in size, what economic theory would help us explain this phenomenon? A. Stolper-Samuelson. B. Melitz. C. Ricardian. D. Cournot. Explain your answer in up to 200 words and using a diagram
You are watching the nightly news. A political candidate being interviewed says, "I'm for free trade, but it must be fair trade. If our foreign competitors will not raise their environmental regulations, reduce subsidiaries to their export industries, and lower tariffs on their imports of our goods, we should retaliate with tariffs and import quotas on there goes to show them that we won't be played for fools!" A) If a foreign country artificially lowers the cost of production for its producers with lax environmental regulations and direct subsidiaries and then exports the products to us, who gains and who loses in our country, producers or consumers? B) Continuing form part A above, does our country gain or lose? Why? C) If a foreign country subsidizes the production of a good exported to the United States, who bears the burden of their mistaken policy? D) What happens to our overall economic well-being if we restrict trade with a country that subsidizes its export industries?…
Question 1: Germany and India only produce two goods. They have the same fixed resources, are equally efficient, and both countries have constant opportunity costs between the two goods. In one month, Germany can produce 200,000 automobiles or 60,000 hand-held computers. India can produce 150,000 automobiles or 50,000 hand-held computers. A. Graph the given information. B. What is the opportunity cost for Germany to produce automobiles? C. What is the opportunity cost for India to produce automobiles? D. What is the opportunity cost for Germany to produce hand-held computers? E. What is the opportunity cost for India to produce band-held computers? F. Which nation has the absolute advantage in automobiles, which has the absolute advantage in hand-held computers? G. Which nation has the comparative advantage in automobiles, which has the comparative advantage in hand-held computers? H. Can these nations benefit from trade? Explain how. Be detailed, use numbers and prove your answer.
Many trading partners trade the same goods and services with one another. The U.S. exports automobiles to Europe and Europe exports automobiles to the United States. In fact, that's true for food, appliances, computers and many other goods. Does intra-industry trade contradict the theory of comparative advantage? Why or why not?
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	A. a unique trading ratio of these two goods that will benefit both countries.
	B. a unique trading ratio at which Country A will have gains from trade, but Country B will not.
	C. a range of trading ratios that lies between the opportunity costs of each good for both countries at which both countries will benefit from trade.
	D. a unique trading ratio at which Country B will have gains from trade, but Country A will not.
	E. a range of trading ratios that provides gains from trade only to Country A.