Economics Today (19th Edition)
19th Edition
ISBN: 9780134478777
Author: Roger LeRoy Miller
Publisher: PEARSON
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Chapter 26, Problem 26.5LO
To determine
Network effect and the functions of a two sided market.
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Responsd to Luis Rodriguez
1800 tons of pomegranates a year is a lot of sweetness!
So, you can get 71 Afghanis for $1? How cool. Does that mean you can buy a lot of stuff in Afghanistan for only $1? How do you know that your purchasing power in Afghanistan is stronger than in the United States?
Yes, with an exchange rate of 71 Afghan Afghani for 1 US dollar, you can buy many things in Afghanistan for just $1. However, purchasing power isn't solely determined by the exchange rate. It also depends on the cost of goods and services in each country. For example, if a meal in Afghanistan costs 200 Afghanis, you would need about $2.82 to buy that meal in US dollars (since 200 Afghanis divided by 71 Afghanis per dollar equals approximately $2.82). So, while the exchange rate allows you to get more Afghanis for your dollars, you also need to consider how much things cost in Afghanistan.
Now that the world seems to like Afghani stuff and is buying more of it, does that mean your…
The idea that a country can experience gains from trade means that it can
A) consume at a point outside its production possibilities frontier.
B) increase its exports.
C) increase the efficiency of its production.
D) experience a bowed-out production possibilities frontier.
A country is likely to have a comparative advantage in a land-intensive activity if it has a
A) alot of land relative to its population.
B) large population relative to its landmass.
C) higher opportunity cost of producing technology.
D) large amount of capital equipment relative to its population.
Chapter 26 Solutions
Economics Today (19th Edition)
Ch. 26 - Prob. 26.1LOCh. 26 - Prob. 26.2LOCh. 26 - Prob. 26.3LOCh. 26 - Prob. 26.4LOCh. 26 - Prob. 26.5LOCh. 26 - Prob. aFCTCh. 26 - Prob. bFCTCh. 26 - Prob. cFCTCh. 26 - Prob. dFCTCh. 26 - Prob. 1CTQ
Ch. 26 - Prob. 2CTQCh. 26 - Prob. 1FCTCh. 26 - Prob. 2FCTCh. 26 - Prob. 1PCh. 26 - Prob. 2PCh. 26 - Prob. 3PCh. 26 - Prob. 4PCh. 26 - Prob. 5PCh. 26 - Prob. 6PCh. 26 - Prob. 7PCh. 26 - Prob. 8PCh. 26 - Prob. 9PCh. 26 - Prob. 10PCh. 26 - Prob. 11PCh. 26 - Prob. 12PCh. 26 - Prob. 13PCh. 26 - Prob. 14PCh. 26 - Prob. 15PCh. 26 - Prob. 16PCh. 26 - Prob. 17PCh. 26 - Prob. 18PCh. 26 - Prob. 19P
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