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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.

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.

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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PART B– Questions T0 – 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 Argentina Britain Canada barrel of crude oil pound of beef 60 50 70 1 3 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 barrel of crude oil Britain Canada Total Autarky (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 lọc of 1 barrel of oil 60 50 70 1 3 5 OC of 1 pond of beef • Calculate the quantities of crude oil and beef produced in each country, consistent with the country's comparative advantage. |Quantities produced Argentina barrel of crude oil pound of beef Britain Canada Total Trade
Transcribed Image Text:PART B– Questions T0 – 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 Argentina Britain Canada barrel of crude oil pound of beef 60 50 70 1 3 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 barrel of crude oil Britain Canada Total Autarky (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 lọc of 1 barrel of oil 60 50 70 1 3 5 OC of 1 pond of beef • Calculate the quantities of crude oil and beef produced in each country, consistent with the country's comparative advantage. |Quantities produced Argentina barrel of crude oil pound of beef Britain Canada Total Trade
4:07 1 File Details Spring-2222-ECO2023 PRINC ECONOMICS II-1188 c. 150 d. 400 22. When countries specialize, Britain produces pounds of beef. а. О b. 700 с. 150 d. 400 23. When countries specialize, Canada produces pounds of beef. а. О b. 700 с. 150 d. 400 24. Country of production of crude oil. a. Argentina b. Britain c. Canada d. No country 25. Country of production of beef. a. Argentina b. Britain has comparative advantage in has comparative advantage in c. Canada d. No country 26. Countries gain from trade because specialization increases a. Trade deficit b. Unemployment c. Efficiency d. Inflation 27. Countries should trade with trading partners that a. Are equally technologically advanced b. Use superior technology in every industry c. Use less advanced technology in every industry d. Use different technologies, because trade benefits all 1 Pr...us Dashboard Calendar To Do Notifications Inbox 因
Transcribed Image Text:4:07 1 File Details Spring-2222-ECO2023 PRINC ECONOMICS II-1188 c. 150 d. 400 22. When countries specialize, Britain produces pounds of beef. а. О b. 700 с. 150 d. 400 23. When countries specialize, Canada produces pounds of beef. а. О b. 700 с. 150 d. 400 24. Country of production of crude oil. a. Argentina b. Britain c. Canada d. No country 25. Country of production of beef. a. Argentina b. Britain has comparative advantage in has comparative advantage in c. Canada d. No country 26. Countries gain from trade because specialization increases a. Trade deficit b. Unemployment c. Efficiency d. Inflation 27. Countries should trade with trading partners that a. Are equally technologically advanced b. Use superior technology in every industry c. Use less advanced technology in every industry d. Use different technologies, because trade benefits all 1 Pr...us Dashboard Calendar To Do Notifications Inbox 因
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