EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 3QCMC
To determine
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
When two countries decide to specialize and exchange, both countries will be able to consume
a. at a point on the production possibilities frontier
b. at a point outside the production possibilities frontier
c. at anypoint point inside the production possibilities frontier
Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?
a.
Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
b.
Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
c.
Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
d.
Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.
8
Chapter 3 Solutions
EBK ESSENTIALS OF ECONOMICS
Knowledge Booster
Similar questions
- George and Laura live on an island in the Caribbean. Their diet is fish and biscuits. George can bake 20 biscuits or spear 10 fish each day, while Laura can bake 48 biscuits or spear 12 fish each day. For each person, costs remain constant. According to the preceding information, Select one: a. George has a comparative advantage in the production of both goods. b. Laura has a comparative advantage in the production of both goods c. George has a comparative advantage in producing biscuits, and Laura has a comparative advantage in producing fish. d. George has a comparative advantage in producing fish, and Laura has a comparative advantage in producing biscuitsarrow_forwardThere are two countries: Country A and Country B. These countries have the same amount of resources and both produce the same two goods, pencils and markers. The opportunity cost of pencils in Country A is ½ markers per pencil and the opportunity cost of pencils in Country B is 4 markers per pencil. Which country has a comparative advantage in each good? Group of answer choices Country A has a comparative advantage in both goods Country B has a comparative advantage in both goods Country A has a comparative advantage in markers; Country B has a comparative advantage in pencils Country A has a comparative advantage in pencils; Country B has a comparative advantage in markersarrow_forwardREAD THOROUGHLY! Molly is Person A; John is person B 2 people from the same house do two things: they give rides and deliver meals Molly can provide 4 taxi rides or 2 meal deliveries in an hour. John can provide 5 taxi rides or 4 meal deliveries in an hour. Who has the absolute advantage in the provision of taxi rides? Who has the comparative advantage in the provision of taxi rides? Absolute advantage: Person A Comparative advantage: Person A Absolute advantage: Person B Comparative advantage: Person A Absolute advantage: Person A Comparative advantage: Person B Absolute advantage: Person B Comparative advantage: Person B What is a price of taxi rides (in terms of meal deliveries) at which BOTH Molly and John will be better o" by specialization and trade?arrow_forward
- The figure below depicts the production possibilities curve (PPC) of a country. It also depicts the consumption possibilities curve (CPC) when the country is engaged in trade with one other country. Point C is this country's consumption when that trade occurs. Quantity of 350 good y 300 250 200 150 100 50 0 0 20 40 19 C 60 80 100 120 Quantity of good x Calculate how much this country trades with the other country in good y when the two countries engage in free trade. Enter a whole number only. Enter a positive number if this country exports good y, and a negative number if it imports it. Enter O if the answer cannot be obtained with the information given. Since this is a graphical question, approximate answers (within 20 of the exact answer) are accepted. Hint: consider how much the country produces and consumes this good.arrow_forwardBob and Erik are both experienced in making pizzas and burgers. In one day, Bob can make 8 pizzas or 32 burgers. With the same effort and in the same day, Erik can make 12 pizzas or 36 burgers. Who has the absolute advantage in making pizzas and who has the absolute advantage in making burgers? Who has the comparative advantage in each activity? Show your derivations. According to the principle of comparative advantage, in which activity should each person (Bob and Erik) specialize in order to gain from trade? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardThe accompanying Production Possibilities Frontiers (PPF) represent hypothetical levels of production for Honduras and Brazil. Assume the two countries are initially producing and consuming in autarky at point A on each of their PPFs. Suppose these countries decide to trade. Each country will specialize in the production of the good for which it has a comparative advantage. a. What will each country produce? a. Honduras will produce both goods. b. Brazil will produce both goods. c. Honduras will produce bananas and Brazil steel. d. Honduras will produce steel and Brazil bananas. b. Suppose each country specializes in the production of the good for which it has a comparative advantage, and they trade at a price of of 4,000 tons of steel for 6,000 tons of bananas. Place the points labeled "Post Trade Consumption" to show the amounts of bananas and steel each country will have to consume after they trade. (look at image)arrow_forward
- a) Country Utopia produces 40 widgets and 20 gadgets. Draw the PPF and explain. (1) b) What change can shift the PPF outward or to the right for Country Utopia? Please draw the shift and explain. (1) 2. "Two countries can achieve gains from trade even if one of the countries has an absolute advantage in the production of ALL goods." Please explain if the statement is true or false. Explain. (1) 3. Draw the following curve when, x = 1, x = 2, x = 3, x = 4, x = 5 (2.5) a) y = 2 + 5x b) Calculate the slope. Is the slope positive or negative? 4. Draw the following curve when, x = 1, x = 2, x = 3, x=4, x = 5 (2.5) a) y = 16 2x b) Calculate the slope. Is the slope positive or negative? can you draw all the slope and curves?arrow_forwardGary and Brenda both have similar businesses in the garment industry making caps and backpacks. In one day, Gary can make 60 caps and 12 backpacks when he divides his production resources equally between the two products. In one day, Brenda can produce 80 caps and 20 backpacks. Answer the following questions and show all calculations to support your answers. a. Who has the comparative advantage in producing backpacks? Explain with calculations.b. What is Brenda's opportunity cost of making a cap compared to Gary's? Explain with calculations.c. Based on your calculations in a) and b) above, who should specialize in making what if they intend to trade? Explain with calculations.d. If Gary and Brenda decide to specialize in what they do best, what would be the new production per day for each of them? Explain with calculations.e. If Gary and Brenda decide to trade, what would be the terms of trade for a backpack and how does each benefit from trading? Explain with calculations.arrow_forwardConsider the following information: Country A's opportunity cost of producing vegetables is lower than Country B's. Country B's opportunity cost of producing electronics is lower than Country A's. Country A is absolutely better at producing both goods. If the two countries decide to specialize and trade then: O Each country will be able to produce and consume at a point outside their production possibilities frontier. O Each country will be able to consume at a point outside their production possibilities frontier. O Each country will be able to produce at a point outside their production possibilities frontier. O Each country's production possibilities frontier will shift outward. « Previous Next ASUS 17 6 8arrow_forward
- Bill and Fred bake cakes and pies. Bill's opportunity cost of baking 1 pie is 3 cakes. Fred's opportunity cost of baking 1 pie is 5 cakes. Who should bake the pie? Group of answer choices Fred Bill A country should specialize in producing the goods for which it has the highest opportunity cost. Group of answer choices True False If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish. Group of answer choices True Falsearrow_forwardJared takes 10 minutes to wash dishes and 20 minutes to write a paper. Jason takes 10 minutes to wash dishes and 30 minutes to write a paper. Which of the following statements is correct? Jared has a comparative advantage in writing a paper. O Jared has absolute advantage in writing the paper. Jared has a comparative advantage in washing dishes. O Jared has absolute advantage in washing the dishes.arrow_forwardWhen two individuals produce efficiently and then make a mutuallybeneficial trade based on comparative advantage, a. they both obtain consumption outside their production possibilitiesfrontier. b. they both obtain consumption inside their production possibilitiesfrontier. c. one individual consumes inside her production possibilities frontier,while the other consumes outside hers. d. each individual consumes a point on her own production possibilitiesfrontierarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning