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. 1. Gains from tradeConsider two neighboring Island countries called Euphoria and Bellissima. They each have 4 million labor hours available per month that they can useto produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor.CountryEuphoriaBellissimaJeans(Pairs per hour of labor)58Rye(Bushels per hour of labor)2016Initially, suppose Bellissima uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce rye, while Euphoriauses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce rye. Consequently, Euphoria produces 15 millionpairs of jeans and 20 million bushels of rye, and Bellissima produces 8 million pairs of jeans and 48 million bushels of rye. Assume there are no othercountries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye itproduces.Euphoria's opportunity cost of producing 1 pair of jeans isof rye. Therefore,advantage in the production of rye.of rye, and Bellissima's opportunity cost of producing 1 pair of jeans ishas a comparative advantage in the production of jeans, andhas a comparativeSuppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. Inthis case, the country that produces jeans will produce million pairs per month, and the country that produces rye will producemillion bushels per month.

Comparative advantage is when a country is able to produce a good at a lower opportunity cost.…

Euphoria's opportunity cost of producing 1 pair of jeans is, of rye. Therefore, advantage in the production of rye. of rye, and Bellissima's opportunity cost of producing 1 pair of jeans is has a comparative advantage in the production of jeans, and has a comparative Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce million pairs per month, and the country that produces rye will produce million bushels per month.

Euphoria's opportunity cost of producing 1 pair of jeans is, of rye. Therefore, advantage in the production of rye. of rye, and Bellissima's opportunity cost of producing 1 pair of jeans is has a comparative advantage in the production of jeans, and has a comparative Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce million pairs per month, and the country that produces rye will produce million bushels per month.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter21: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

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1. Gains from trade Consider two neighboring island countries called Dolorium and Contente. They each have 4 million labor hours available per week that they can use to produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor. Country Dolorium Contente Jeans Rye (Pairs per hour of labor) (Bushels per hour of labor) 20 16 Initially, suppose Contente uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Dolorium produces 15 million pairs of jeans and 20 million bushels of rye, and Contente produces 8 million pairs of jeans and 48 million bushels of rye. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and rye it produces.…
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ome 3. Gains from trade ses Consider two neighboring island countries called Dolorium and Arcadia. They each have 4 million labor hours available per week that they can use to Mog and Study Tools produce jeans, rye, or a combination of both. The following table shows the amount of jeans or rye that can be produced using 1 hour of labor. tal Options lege Success Tips Jeans Rye A- Country (Pairs per hour of labor) (Bushels per hour of labor) reer Success Tips Dolorium 4 16 ENDED FOR YOU Arcadia 10 Initially, suppose Arcadia uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce rye, while Dolorium uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce rye. Consequently, Dolorium produces 12 million pairs of jeans and 16 million bushels of rye, and Arcadia produces 5 million pairs of jeans and 30 million bushels of rye. Assume there are no other countries ng Focused willing to trade goods, so, in the absence…
Suppose there exist two imaginary countries, Everglades and Yosemite. Their labor forces are each capable of supplying four million hours per day that can be used to produce shorts, almonds, or some combination of the two. The following table shows the amount of shorts or almonds that can be produced by one hour of labor. Country Everglades Yosemite Shorts (Pairs per hour of labor) Almonds (Pounds per hour of labor) 20 16 Suppose that initially Yosemite uses 1 million hours of labor per day to produce shorts and 3 million hours per day to produce almonds, while Everglades uses 3 million hours of labor per day to produce shorts and 1 million hours per day to produce almonds. As a result, Everglades produces 15 million pairs of shorts and 20 million pounds of almonds, and Yosemite produces 8 million pairs of shorts and 48 million pounds of almonds. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two countries, each country…
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