Q6.Production possibilities frontier, gains from trade, comparative advantage,absolute advantage, and returns to scale.Suppose that there are two countries, A and B. The production possibilities frontier ofcountry A is given by coconuts A + √fish = 8, and the production possibilities frontierof country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount ofcoconuts produced by country i and fish, denotes the amount of fish produced by countryi.Assume that the utility function of each country i is given by the expressionU (coconutsi, fishi) = min (coconutsi, fishi)where coconuts, denotes the amount of coconuts consumed by country i and fish, is theamount if fish consumed by country i.Suppose that all gains from trade are divided equally between the countries.Determine the utility of each country when the agents can trade.Write the utility of country A hereand provide a detailed explanation below.and the utility of country B here

To determine the utility of each country when the agents can trade, we must first find the…

Answered: Write the utility of country A here and…

Business

Economics

Write the utility of country A here and provide a detailed explanation below. and the utility of country B here

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: When you go to the store to buy some M&Ms candy, you find they are LESS expensive than they were…

A: Demand continuity and risk perception from buyers , and their capacity to require in existing…

Q: What is the objective of the price change?

A: Price change shows that how during a trading period, there is a difference in price of the same…

Q: If the economy goes into a recession and income fall, what happen in the market for inferior good?

A: Inferior goods are the goods that are inversely related to the income ie these might be low-quality…

Q: What do you mean by an inferior goods give some examples?

A: According to the given question A good is basically said to be a inferior in a generally related…

Q: Aphrodite attends the university of Toronto. She has an income of $100, and the price of X is $2.…

A: We are going to work out this problem using Budget constraint equation.

Q: When the price of fried chicken increases, the demand curve for fried chicken Oshifts to the left or…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: In a village, Lou and Lisa are the only people who buy haircuts. When the price is $15.00, Lisa…

A: Demand is the quantity of an item or service that consumers buy at various prices during a specific…

Q: Price per Ice-cream (Rs.) Demand for Ice cream (Qd) Supply for Ice cream (Qs) 140…

A: The demand and supply schedule is given as follows- Price per Ice-cream (Rs.)…

Q: need explanation on HOW for each HOW The price of bananas in Australia will rise. HOW The quantity…

A: International trade is the actual exchange of money, goods, and services across national boundaries…

Q: You notice that as income of consumers increases, the demand for cell phones also increases. In such…

A: This can be defined as the type of good in which the income of the purchaser rises. The purchaser…

Q: Draw a correctly labeled graph of ONLY the market demand, if Angel, Nadia, and Sally are the only…

A: An individual demand curve depicts the quantity demanded of a good by a single consumer at different…

Q: Cheese and buns are comements. What will happen if cheese becomes less expensive?

A: Definition of Complementary goods : These are jointly demanded goods.

Q: What aspects of the market for digital cameras are influencing it?

A: Digital cameras are in high demand. The digital camera market is very cutthroat because of…

Q: Price ($/bushel) Ps Po A В B:C F D E D S Q₁ Qo Q₂ Quantity of Wheat (millions of bushels). Q Q

A: A demand curve shows the relationship between the price of a good and the services and the demand…

Q: If the price of a product decreases by 10 percent and the quantity demanded increases by 5 percent…

A: Price Elasticity of Demand measures the percenatge change in quantity demanded due to percentage…

Q: What are the implications of the welfare on consumers, producers and the society?

A: The study of how the distribution of resources and commodities impacts social welfare is known as…

Q: Suppose Bull Gator Ben has paid his $14,300 donation and purchased eight season tickets at $32 per…

A: Total Profit = Total Revenue - Total Cost In case of profit total revenue exceeds total cost and in…

Q: A political candidate is proposing a large increase in the tax on cigarettes and alcohol. he says…

A: An increase in tax on cigarettes and alcohol will shift the supply curve upward to the left. due to…

Q: Casey earns $150 a week and consumers only fish and shrimp. the price of fish is $3 a pound and the…

A: Microeconomics studies the economic behavior of individual units such as a firm, a market, a…

Q: There is a market for BBQ. There is an increase in the price of chicken. Analyze, describe and…

A: Market equilibrium refers to a scenario at which the quantity demanded is equal to the quantity…

Q: Briefly explain whether each of the following represents a pub- lic good. a. A chef salad sold at…

A: Public goods are services or commodities which tend to benefit all of the members of society and are…

Q: at the market, 8 apples cost $4 how much do 9 apples cost?

A: The cost of a good typically refers to the total amount of money that is required to produce,…

Q: Consider the market for different Apartments. Use the chart below to answer the following questions.…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Imagine you are bundling popcorn, soda and candy for AMC Theaters. You have the following data on…

Q: What is a perfect market

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: In economics, what amount does the demand for a good refer to? The amount people would like to have…

A: In general, demand refers to the ability and desire of a consumer to purchase goods and services and…

Q: What refers to the quantity of goods and services that consumers are willing to buy at a given…

A: Willingness and ability both are required in order to be able to purchase a good.

Q: You go on vacation for 14 days to an island in the middle of the ocean that is known for selling…

A: Supply refers to the amount of a good or service that is available in the market, while demand…

Q: In the market for organs for transplant-such as kidneys, lungs and hearts-the price is fixed at…

Q: demand curve shifts to the right by more than the supply curve shifts to the right. In this case,…

A: When demand curve to right it means demand increase and when supply shift right it means supply…

Q: The demand and supply schedules for sunscreen at a small beach are shown below. Market for…

A: Given Price (dollars per bottle) Quantity of Sunscreen Demanded (bottles) Quantity of Sunscreen…

Q: Homework: Chapter 7 4. Consumer surplus for an individual and a market Q Search this The following…

A: Consumer surplus is an economic measurement that occurs when the price that consumers pay for a…

Q: A popular social media celebrity has recently touted the benefits of taking a hotel mini break in…

A: The problem involves two opposing effects on the price of hotel stays in Australia:The problem…

Q: Draw a supply and demand curve in which you label price axis, quantity axis, supply curve, demand…

A: Demand refers to the units/ quantity that a buyer desires and able to buy at a given market price.…

Q: If Goods are not rationed according to price, what happens?

A: Rationing is done by the government to manage the distribution of goods and services inorder to deal…

Question

Q6.
Production possibilities frontier, gains from trade, comparative advantage,
absolute advantage, and returns to scale.
Suppose that there are two countries, A and B. The production possibilities frontier of
country A is given by coconuts A + √fish = 8, and the production possibilities frontier
of country B is given by coconuts B + √fishB = 8 where coconuts, denotes the amount of
coconuts produced by country i and fish, denotes the amount of fish produced by country
i.
Assume that the utility function of each country i is given by the expression
U (coconutsi, fishi) = min (coconutsi, fishi)
where coconuts, denotes the amount of coconuts consumed by country i and fish, is the
amount if fish consumed by country i.
Suppose that all gains from trade are divided equally between the countries.
Determine the utility of each country when the agents can trade.
Write the utility of country A here
and provide a detailed explanation below.
and the utility of country B here

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: First Part

VIEW

Step 2: second part

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Illustrate by graph the equilibrium point in the market, then find the following: (Notes that you need to do three graphs). A) When the quantity demanded exceeds quantity supplied. B) When the quantity supplied exceeds quantity demanded. C) The equilibrium point.
In 2011 oil production in Libya was interrupted by political unrest. At the same time, the demand for oil by China continued to rise.a. Demonstrate the impact on the quantity of oil bought and sold. Instructions: Draw a parallel shift in the demand or supply curve(s) by grabbing, dragging, and then dropping the curve(s) to the new position(s). In the market for oil, compared to the initial equilibrium (E0), the impact of these events on price is (Click to select) (to increase price, to decrease price or uncertain) and the impact on quantity is (Click to select) (to decrease quantity, to increase quantity, or uncertain)b. Oil production in Libya returned to its original levels by the end of 2012. What was the likely effect on equilibrium oil price and quantity?Compared to the equilibrium identified in part a, price will (Click to select) ( remain unchanged, decrease, increase) and quantity will (Click to select) (increase, decrease, or remain unchanged )
Explain how an increase in income would affect demand for an inferior good and explain why giving an example?
Bread and mayo are complement goods True/False
Complete the following table by selecting the term that matches each definition. Definition The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises The amount of a good that sellers are willing and able to supply at a given price A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices PRICE (Dollars per Record) 20 18 Apply your understanding of the previous key terms by completing the following scenario with the appropriate terminology. 16 14 12 10 8 4 Your professor claims that one of the curves found on the following graph correctly illustrates the supply curve for records: 2 0 0 $₂ S 1 1 2 6 7 3 5 QUANTITY (Millions of Records) 4 Quantity Supplied 8 9 10 Supply Curve O (?) O O Supply…
How did you get the equilibrium quantity and equilibrium price?
Q2: The price of milk has increased from $2 to $2.2 and quantity decreases from 10 to 8 gallons. Find PED and comment on your findings.
What is the difference between a "need" and a "value?"
If butter is the product, what happens when the price of magarine goes up?