Explain the movement of two countries from the initial point to the new point.

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Answer 1

Question

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

(b)

To determine

Identify the total production for the two countries.

(c)

To determine

Identify the gain from trade.

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

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1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically. 2. Consider the following table of long-run total costs for three different firms: Quantity Total Cost ($) Firm A Firm B Firm C 1 60 11 21 2 70 24 34 3 80 39 49 4 90 56 66 5 100 75 85 6 110 96 106 7 120 119 129 Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer with necessary calculations.

Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.

1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically.

Answer 2

Question

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

(b)

To determine

Identify the total production for the two countries.

(c)

To determine

Identify the gain from trade.

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

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Answer 3

Question

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

(b)

To determine

Identify the total production for the two countries.

(c)

To determine

Identify the gain from trade.

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

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Answer 4

Question

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

(b)

To determine

Identify the total production for the two countries.

(c)

To determine

Identify the gain from trade.

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

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Answer 5

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

(b)

To determine

Identify the total production for the two countries.

(c)

To determine

Identify the gain from trade.

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

Answer 6

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

Answer 7

Chapter 9, Problem 4QE

(a)

To determine

Explain the movement of two countries from the initial point to the new point.

Answer 8

(b)

To determine

Identify the total production for the two countries.

Answer 9

(b)

To determine

Identify the total production for the two countries.

Answer 10

(c)

To determine

Identify the gain from trade.

Answer 11

(c)

To determine

Identify the gain from trade.

Answer 12

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

Answer 13

(d)

To determine

Identify the change in analysis if the per unit cost of production falls with rising output.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 9.1 - Prob. 1Q Ch. 9.1 - Prob. 2Q Ch. 9.1 - Prob. 3Q Ch. 9.1 - Prob. 4Q Ch. 9.1 - Prob. 5Q Ch. 9.1 - Prob. 6Q Ch. 9.1 - Prob. 7Q Ch. 9.1 - Prob. 8Q Ch. 9.1 - Prob. 9Q Ch. 9.1 - Prob. 10Q

Explain the movement of two countries from the initial point to the new point.

Solution Summary: The author explains the movement of two countries from the initial point to the new point. The countries get consumption combinations only when they are making specialisation on production.

Explain the movement of two countries from the initial point to the new point.

Identify the total production for the two countries.

Identify the gain from trade.

Identify the change in analysis if the per unit cost of production falls with rising output.

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Chapter 9 Solutions