This exercise applies the basic Ricardian model of one factor and two goods. The table below contains the unit labor requirements in Foreign and Home for each of two goods. Use this information to answer the question that follows.ChocolateWineaLw=3 hours per gallonLc 1 hour per poundaLc = 5 hours per poundwhere:HomeForeignO A. 0.050 pounds of chocolate.ⒸB. 1 pound of chocolate.OC. 0.25 pounds of chocolate.O D. 0.200 pounds of chocolate.aLC= number of labor hours needed to produce a unit of chocolate in Home;alw= number of labor hours needed to produce a unit of wine in Home;= number of labor hours needed to produce a unit of chocolate in Foreign;*aLw=4 hours per gallonaLC* = number of labor hours needed to produce a unit of wine in Foreign;alwPcPwthe price per pound of chocolate on world markets;the price per gallon of wine on world markets.Which of the following statements is true?O A. Home specializes in the production of chocolate and wine.O B. Foreign specializes in the production of chocolate and wine.O C. Home specializes in the production of wine.ⒸD. Foreign specializes in the production of wine.Suppose that Foreign uses an hour of labor to produce wine and then trades that output for chocolate. If Pc/Pw = 1, through trade Foreign can gain:

The Richardian theory, also known as the theory of comparative advantage, is an economic theory that…

where Home Foreign ac aw Chocolate Lc = 1 hour per pound aLC 5 hours per pound number of labor hours needed to produce a unit of chocolate in Home; number of labor hours needed to produce a unit of wine in Home; BLC = number of labor hours needed to produce a unit of chocolate in Foreign; a.*. = number of labor hours needed to produce a unit of wine in Foreign; aLW Pc = the price per pound of chocolate on world markets; Pw the price per gallon of wine on world markets. Wine alw = 3 hours per gallon aLw=4 hours per gallon Which of the following statements is true? OA. Home specializes in the production of chocolate and wine. OB. Foreign specializes in the production of chocolate and wine. C. Home specializes in the production of wine. D. Foreign specializes in the production of wine. Suppose that Foreign uses an hour of labor to produce wine and then trades that output for chocolate. If Pc/Pw=1, through trade Foreign can gain:

where Home Foreign ac aw Chocolate Lc = 1 hour per pound aLC 5 hours per pound number of labor hours needed to produce a unit of chocolate in Home; number of labor hours needed to produce a unit of wine in Home; BLC = number of labor hours needed to produce a unit of chocolate in Foreign; a.*. = number of labor hours needed to produce a unit of wine in Foreign; aLW Pc = the price per pound of chocolate on world markets; Pw the price per gallon of wine on world markets. Wine alw = 3 hours per gallon aLw=4 hours per gallon Which of the following statements is true? OA. Home specializes in the production of chocolate and wine. OB. Foreign specializes in the production of chocolate and wine. C. Home specializes in the production of wine. D. Foreign specializes in the production of wine. Suppose that Foreign uses an hour of labor to produce wine and then trades that output for chocolate. If Pc/Pw=1, through trade Foreign can gain:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

18. What word do we use to refer to the amount of goods and services produced for each hour of a worker’s time?
The revenue from the sale of a product is, in dollars, R = 1500x + 3000(2x+3)-1 - 1000 where x is the number of units sold. Find the marginal revenue when 200 units are sold. (Round your answer to two decimal places.) $ Interpret your result. If the sales go from 200 units sold to units sold, the revenue will increase by about $ Suppose that the weekly sales volume y (in thousands of units sold) depends on the price per unit (in dollars) of the product according to the following formula. y = 30(3p+ 1) −2/5, p > 0 (a) What is the rate of change in sales volume when the price is $24? (Round your answer to three decimal places.) dy = dp (b) Interpret your answer to part (a). (Round your answer to the nearest whole number.) If the price increases $1, the sales volume will decrease by If the demand for q units of a product priced at $p per unit is described by the equation p = 500 √29 + 7 find the rate of change of p with respect to q. dp = dq 1 units.
Price (dollars per son of plywood Price (dolars per ton of plywood 94 Quantity (tons of plywood per monch) Figure A D2 Quancity (tons of plywood per monch) Figure B Price (dollars per ton of plywood) Price (dollars per ton of plywood) Quancity (tons of plywood per month) Quantity (tons of plywood per monch) Figure C Figure D 20) A construction boom occurs and many of the new buildings ned plywood for their framing, Which of the figures above best illustrates this change? 20) A) Figure A B) Figure B 9Figure C D) Figure D E) Figure A or Figure C 21) New technology for producing plywood is developed. Which of the figures above best illustrates this change 21) A) Figure A B) Figure B OFigure C D) Figure D Figure A and Figure D 22) Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper com crop reduces the cost of feeding steers. The equilibrium quantity of beef will 22) A) decrease. B) definitely either stay the same or decrease stay the same. D)…
You are analysing the annual revenue from the top 5 coffee maker models manufactured in your company, and want to know the comparative revenue made from each model. Rank these 5 coffee makers based on the revenue made this year, from highest to lowest.
Question 2 (a)
In 1 hour, john can make 4 sandwiches or 9 salads. Jane works with John and in one hour she can make 7 sandwiches or 10 salads. Knowing the each work 8 hours per day, if they both allocate 4 hours to each activity, then in total how many salads can be made?
Question 4 Jesse works as a research assistant and is currently surveying participants in a study. In a typical work week Jesse can complete 24 surveys if he only works on surveys and works efficiently. Jesse's professor also wants him to read research papers. In the time it takes Jesse to read 1 research paper he can complete 3 surveys. If Jesse works efficiently, which of the following combinations of surveys and papers can he complete in a typical work week? Read 4 papers and complete 12 surveys Read 72 papers and complete O surveys Read 3 papers and complete 18 surveys Read 12 papers and complete 4 surveys Question 5 Omar and Max are TAs for ECN 104, they have to grade assignments and write exam questions. In an hour, Omar can either grade 15 assignments or write 10 exam questions, Max can either grade 20 assignments or write 11 exam questions. Which of the following statements is TRUE? Max exchanging 10 assignments he has graded for 6 exam questions Omar has written is a mutually…
Graph A O Graph A O Graph B A2 O Graph C O Graph D A B2 Graph B B Which graph illustrates the effects on purchases of Corvettes, if it was suddenly "un cool" to drive one? Graph C C2 D2 Graph D D