Various examples of specialized market or retail outlets and the factors that make the web favorable to specialization. Concept Introduction: Specialization means being able to produce certain limited types of goods and services but at a lower cost and with greater productive efficiency. Absolute advantage is the ability to make certain goods and services at a lower cost compared to other producers. Comparative advantage is to make certain goods and services at a lower opportunity costs than other producers do. While absolute advantage depends on the superiority in the production in production capabilities, the comparative advantage depends on the loss of benefits from not choosing to produce the alternative good. Absolute advantage is comparison in production of same goods with other countries, whereas comparative advantage is the comparison with opportunity cost of production of different goods in the same country with other countries. Comparative advantage is more beneficial to the economies. However, the quotas and tariffs reduce the comparative advantage not allowing efficient use of resources in producing the good that gives highest returns.

Question

1. Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

Answer 1

Question

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 2.4P

To determine

Various examples of specialized market or retail outlets and the factors that make the web favorable to specialization.

Concept Introduction:

Specialization means being able to produce certain limited types of goods and services but at a lower cost and with greater productive efficiency. Absolute advantage is the ability to make certain goods and services at a lower cost compared to other producers. Comparative advantage is to make certain goods and services at a lower opportunity costs than other producers do. While absolute advantage depends on the superiority in the production in production capabilities, the comparative advantage depends on the loss of benefits from not choosing to produce the alternative good. Absolute advantage is comparison in production of same goods with other countries, whereas comparative advantage is the comparison with opportunity cost of production of different goods in the same country with other countries. Comparative advantage is more beneficial to the economies. However, the quotas and tariffs reduce the comparative advantage not allowing efficient use of resources in producing the good that gives highest returns.

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1. Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter." a. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. c. Imagine that the society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves might choose. d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.

A health study tracked a group of persons for five years. At the beginning of the study, 20%were classified as heavy smokers, 30% as light smokers, and 50% as nonsmokers. Resultsof the study showed that light smokers were twice as likely as nonsmokers to die duringthe five-year study, but only half as likely as heavy smokers.A randomly selected participant from the study died during the five-year period. Calculatethe probability that the participant was a heavy smoker

Consider two assets with the following returns: State Prob. of state R₁ R2 1 23 13 25% 5% 2 -10% 1% Compute the optimal portfolio for an investor having a Bernoulli utility of net returns u(r) = 2√√r+ 10. Compute the certainty equivalent of the optimal portfolio. Do the results change if short-selling is not allowed? If so, how?

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 2.4P

To determine

Various examples of specialized market or retail outlets and the factors that make the web favorable to specialization.

Concept Introduction:

Specialization means being able to produce certain limited types of goods and services but at a lower cost and with greater productive efficiency. Absolute advantage is the ability to make certain goods and services at a lower cost compared to other producers. Comparative advantage is to make certain goods and services at a lower opportunity costs than other producers do. While absolute advantage depends on the superiority in the production in production capabilities, the comparative advantage depends on the loss of benefits from not choosing to produce the alternative good. Absolute advantage is comparison in production of same goods with other countries, whereas comparative advantage is the comparison with opportunity cost of production of different goods in the same country with other countries. Comparative advantage is more beneficial to the economies. However, the quotas and tariffs reduce the comparative advantage not allowing efficient use of resources in producing the good that gives highest returns.

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Answer 3

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 2.4P

To determine

Various examples of specialized market or retail outlets and the factors that make the web favorable to specialization.

Concept Introduction:

Specialization means being able to produce certain limited types of goods and services but at a lower cost and with greater productive efficiency. Absolute advantage is the ability to make certain goods and services at a lower cost compared to other producers. Comparative advantage is to make certain goods and services at a lower opportunity costs than other producers do. While absolute advantage depends on the superiority in the production in production capabilities, the comparative advantage depends on the loss of benefits from not choosing to produce the alternative good. Absolute advantage is comparison in production of same goods with other countries, whereas comparative advantage is the comparison with opportunity cost of production of different goods in the same country with other countries. Comparative advantage is more beneficial to the economies. However, the quotas and tariffs reduce the comparative advantage not allowing efficient use of resources in producing the good that gives highest returns.

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Answer 4

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Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

Chapter 2, Problem 2.4P

To determine