With reference to Table 2 below, indicate in what commodity the U.S. and the Philippines have acomparative advantage?Table 2COMMODITYU.S.PhilippinesWheat (bushels/man-hour)71Rice (sacks/man-hour)43

A sensibles may be a basic good utilized in business which will be changed for alternative similar…

Answered: With reference to Table 2 below,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 2-6 One Cell Phone Lumber (per board foot) Estonia 40 hours 8 hours Finland 16 hours 4 hours Table 2-6 shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland. Refer to Table 2-6. If the two countries specialize and trade, who should export cell phones? There is no basis for trade between the two countries. Estonia Finland They should both be importing cell phones.
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Clipboard Image lools Shapes 100 200 300 400 500 600 700 800 900 1000 1100 The following diagram is for Country A based on the Ricardo madel. Wheat (millions) 30 Terms of Trade E 15 PPF Corn 25 30 50 (millions) Refer to the figure above. Imports of this country equal O 25 million corns O 50 million corns O 15 million wheat O eat 30 million wh +1503, 451px 1 1024 x 744px 1L 1688 × 1240px P Type here to search 1009
Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domestic demand for coffee is: Q = 500-2p and the domestic supply of coffee is: Q* = -150+ 3p
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Food (Comparative Advantage) The consumption possibilities frontiers shown by the blue lines in the following exhibit assume terms of trade of 1 unit of clothing for 1 unit of food. What would the consumption possibilities frontiers look like if the terms of trade were 1 unit of clothing for 2 units of food? Production (and Consumption) Possibility Frontiers with Trade (Millions of Units Per Day) (a) United States (b) Izodia 600 500- 400 600 500 U 400 300 200 U 100 Food 300 200 100 13 0 100 200 300 400 Clothing 0 100 200 300 400 Clothing
1. Welfare effects of free trade in an exporting country The following graph shows the same domestic demand and supply curves for lemons in Bolivia. Suppose that the Bolivian government changes its international trade policy to allow free trade in lemons. The horizontal black line (PWPW) represents the world price of lemons at $800 per tonne. Assume that Bolivia's entry into the world market for lemons has no effect on the world price and there are no transportation or transaction costs associated with international trade in lemons. Also assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. Use the green point (triangle symbol) to shade consumer surplus, and then use the purple point (diamond symbol) to shade producer surplus When Bolivia allows free trade of lemons, the price of a tonne of lemons in Bolivia will be $800.
Figure 9-1 The figure illustrates the market for coffee in Guatemala 130 88888888 140 130 120- 110 100 90 70+ S 50 RRS 40 30 89 20 10- Price & 12 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 9. Refer to Figure 9-1. With trade, Guatemala will a. export 22 units of coffee b. export 10 units of coffee. c. import 30 units of coffee. d. import 12 units of coffee. Domestic supply World price Domestic demand + 42 44 46 48 50 52 Quantity
10
solve d, e,f
3. Question 3 A country, called 'Bikyland', does not allow for international trade. Bikyland produces motorbikes for her own consumption. At the equilibrium without international trade, the domestic price (Pdom) is $2000 per motorbike and the quantity (Qdom) is 5 million motorbikes. Then, Bikyland opens up her motorbike market for trade and finds that the world price (Pw) is $2500 per motorbike. Domestic supply (Qsdom) rises to 6 million and domestic demand (QDdom) falls to 4 million motorbikes. 3.1 Draw a graph of the motorbike market with SC, DC, Pdom Qdom Pw, Qsdom and Qpdom- Your graph should show all the numbers. 3.2 At the equilibrium without trade, calculate the revenue that producers/suppliers receive. 3.3 What is the domestic price of motorbikes after international trade is allowed? Will Bikyland become an importer or an exporter? Give a reason for your answer. 3.4 Does joining international trade lead to a shortage or surplus of supply? What is the amount? 3.5 Calculate the…
Explain which product each of the countries should specialise in and export. Use the information relating to comparative advantage to support your answer.

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With reference to Table 2 below, indicate in what commodity the U.S. and the Philippines have a comparative advantage? Table 2 COMMODITY U.S. Philippines Wheat (bushels/man-hour) Rice (sacks/man-hour) 7 1 4 3