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Use the following assumptions to answer all questions: • There are three countries – Argentina, Britain and Canada. • Each country produces and consumes two kinds of goods – crude oil and beef. • All countries make their goods from a single type of input – labor - and each country has 700 hours of labor available to produce crude oil and beef. • Each country demands 5 (five) barrels of crude oil. This assumption simply means that a country must have exactly 5 barrels of crude oil – it may produce them domestically, it may import them from abroad, or

Use the following assumptions to answer all questions: • There are three countries – Argentina, Britain and Canada. • Each country produces and consumes two kinds of goods – crude oil and beef. • All countries make their goods from a single type of input – labor - and each country has 700 hours of labor available to produce crude oil and beef. • Each country demands 5 (five) barrels of crude oil. This assumption simply means that a country must have exactly 5 barrels of crude oil – it may produce them domestically, it may import them from abroad, or

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer the following questions using the images below for Ricardian theory of trade.
4:35 4 l LTE Based on the above calculations, answer questions 10 through 27: Consider autarky, when countries do not trade and each country produces its own crude oil and beef. 10. In autarky, Argentina produces a. 0 b. 5 barrels of oil. с. 10 d. 15 11. In autarky, Britain produces a. O b. 5 c. 10 d. 15 12. In autarky, Canada produces a. O b. 5 c. 10 d. 15 13. In autarky, Argentina produces barrels of oil. а. О barrels of oil. pounds of beef. a. O b. 70 c. 150 d. 400 14. In autarky, Britain produces a. 0 b. 70 c. 150 d. 400 15. In autarky, Canada produces , a. 0 b. 70 с. 150 d. 400 16. Country of production of crude oil. a. Argentina b. Britain c. Canada d. No country 17. Country of production of beef. pounds of beef. pounds of beef. has absolute advantage in has absolute advantage in
Transcribed Image Text:4:35 4 l LTE Based on the above calculations, answer questions 10 through 27: Consider autarky, when countries do not trade and each country produces its own crude oil and beef. 10. In autarky, Argentina produces a. 0 b. 5 barrels of oil. с. 10 d. 15 11. In autarky, Britain produces a. O b. 5 c. 10 d. 15 12. In autarky, Canada produces a. O b. 5 c. 10 d. 15 13. In autarky, Argentina produces barrels of oil. а. О barrels of oil. pounds of beef. a. O b. 70 c. 150 d. 400 14. In autarky, Britain produces a. 0 b. 70 c. 150 d. 400 15. In autarky, Canada produces , a. 0 b. 70 с. 150 d. 400 16. Country of production of crude oil. a. Argentina b. Britain c. Canada d. No country 17. Country of production of beef. pounds of beef. pounds of beef. has absolute advantage in has absolute advantage in
4:35 4 l LTE PART B– QueSuONS TO – 27 Use the following assumptions to answer all questions: • There are three countries – Argentina, Britain and Canada, • Each country produces and consumes two kinds of goods – crude oil and beef. All countries make their goods from a single type of input – labor - and each country has 700 hours of labor available to produce crude oil and beef. • Each country demands 5 (five) barrels of crude oil. This assumption simply means that a country must have exactly 5 barrels of crude oil – it may produce them domestically, it may import them from abroad, or it makes some domestically and imports the rest. • Countries produce goods using the technology described in the table below: Technology Hours of labor needed to produce one unit of good Canada 70 5 Argentina Britain barrel of crude oil pound of beef 50 3 60 Using the above assumptions, answer the following questions: • Calculate the quantities of crude oil and beef produced in each country in autarky (when they do not trade and each country produces its own crude oil and beef) Quantities produced Argentina Britain Canada Total Autarky barrel of crude oil (No trade) pound of beef • Order the countries according to their absolute advantage in production of crude oil • Order the countries according to their absolute advantage in production of beef • Consider the case where countries are free to specialize and trade. In the table below calculate each country's opportunity cost of producing one unit of each good. Argentina Britain Canada barrel of crude oil pound of beef oC of I barrel of oil OC of 1 pond of beef • Calculate the quantities of crude oil and beef produced 60 50 70 5 3 in each country, consistent with the country's comparative advantage. Britain Quantities produced Argentina barrel of crude oil pound of beef Canada Total Trade
Transcribed Image Text:4:35 4 l LTE PART B– QueSuONS TO – 27 Use the following assumptions to answer all questions: • There are three countries – Argentina, Britain and Canada, • Each country produces and consumes two kinds of goods – crude oil and beef. All countries make their goods from a single type of input – labor - and each country has 700 hours of labor available to produce crude oil and beef. • Each country demands 5 (five) barrels of crude oil. This assumption simply means that a country must have exactly 5 barrels of crude oil – it may produce them domestically, it may import them from abroad, or it makes some domestically and imports the rest. • Countries produce goods using the technology described in the table below: Technology Hours of labor needed to produce one unit of good Canada 70 5 Argentina Britain barrel of crude oil pound of beef 50 3 60 Using the above assumptions, answer the following questions: • Calculate the quantities of crude oil and beef produced in each country in autarky (when they do not trade and each country produces its own crude oil and beef) Quantities produced Argentina Britain Canada Total Autarky barrel of crude oil (No trade) pound of beef • Order the countries according to their absolute advantage in production of crude oil • Order the countries according to their absolute advantage in production of beef • Consider the case where countries are free to specialize and trade. In the table below calculate each country's opportunity cost of producing one unit of each good. Argentina Britain Canada barrel of crude oil pound of beef oC of I barrel of oil OC of 1 pond of beef • Calculate the quantities of crude oil and beef produced 60 50 70 5 3 in each country, consistent with the country's comparative advantage. Britain Quantities produced Argentina barrel of crude oil pound of beef Canada Total Trade
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