MACRO ECON 6
MACRO ECON 6
6th Edition
ISBN: 9780357689820
Author: MCEACHERN
Publisher: CENGAGE L
Question
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Chapter 2, Problem 3P

(a)

To determine

The opportunity cost of producing a unit of wheat in the United Kingdom and in the United States.

Concept Introduction:

Absolute Advantage: The ability of a country to do any economic activity more efficiently than others.

Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost.

(b)

To determine

The country that has an absolute advantage in producing wheat and in producing cloth.

Concept Introduction:

Absolute Advantage: The ability of a country to do any economic activity more efficiently than others

Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost

(c)

To determine

The country that has a comparative advantage in producing wheat and in producing cloth.

Concept Introduction:

Absolute Advantage: The ability of a country to do any economic activity more efficiently than others

Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost

(d)

To determine

The country that should specialize in producing wheat and in producing cloth.

Concept Introduction:

Absolute Advantage: The ability of a country to do any economic activity more efficiently than others

Comparative Advantage: The capability of a country to produce the specialized product in which it has a lower opportunity cost

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Tasks Exercise 1 Assess the following functions: 1. f(x)= x2+6x+2 2.f '(x)=10x-2x2+5 a. Find the stationary points. (5 marks) b. Determine whether the stationary point is a maximum or minimum. (5 marks) c. Draw the corresponding curves (5 marks)
Problem 2: The sales data over the last 10 years for the Acme Hardware Store are as follows: 2003 $230,000 2008 $526,000 2004 276,000 2009 605,000 2005 328,000 2010 690,000 2006 388,000 2011 779,000 2007 453,000 2012 873,000 1. Calculate the compound growth rate for the period of 2003 to 2012. 2. Based on your answer to part a, forecast sales for both 2013 and 2014. 3. Now calculate the compound growth rate for the period of 2007 to 2012. 1. Based on your answer to part e, forecast sales for both 2013 and 2014. 5. What is the major reason for the differences in your answers to parts b and d? If you were to make your own projections, what would you forecast? (Drawing a graph is very helpful.)
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