LEMONADE500450400 Alice's PPF3503002502001501005050 100 150 200 250 300 350 400 450 500PIZZASLEMONADE50045040035030025020015010050Betty's PPFLa. There are no circumstances under which both Alick and Betty can benefit from specialization and trade.b. Alice produces more lemonade and Betty produces more pizzas.O c. Both Alice and Betty produce only pizzas.O d. Alice produces more pizzas and Betty produces more lemonade.B (180, 180)50 100 150 200 250 300 350 400 450 500PIZZASFigure 3-4Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can bothAlice and Betty benefit from specialization and trade?

The PPF is also referred to as the production possibility curve (PPC). It is a key economic concept…

Figure 3-4 Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade? a. There are no circumstances under which both Alick and Betty can benefit from specialization and trade. b. Alice produces more lemonade and Betty produces more pizzas. c. Both Alice and Betty produce only pizzas. d. Alice produces more pizzas and Betty produces more lemonade.

Figure 3-4 Refer to Figure 3-4. If point A represents Alice's current production and point B represents Betty's current production, under what circumstances can both Alice and Betty benefit from specialization and trade? a. There are no circumstances under which both Alick and Betty can benefit from specialization and trade. b. Alice produces more lemonade and Betty produces more pizzas. c. Both Alice and Betty produce only pizzas. d. Alice produces more pizzas and Betty produces more lemonade.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter18: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

See similar textbooks

Similar questions

Are the following statements true or false? Explain ineach case.a. “Two countries can achieve gains from trade evenif one of the countries has an absolute advantagein the production of all goods.”b. “Certain talented people have a comparativeadvantage in everything they do.”c. “If a certain trade is good for one person, it can’tbe good for the other one.”d. “If a certain trade is good for one person, it isalways good for the other one.”e. “If trade is good for a country, it must be good foreveryone in the country
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…
According to David Ricardo, O A. If countries specialize where they have an absolute advantage and trade, their efficiency and standard of living can improve O B. Countries should strive to develop their absolute advantage to benefit from trade with other countries O C. If countries specialize where they have a comparative advantage and trade, all groups in their economies will benefit equaly OD. If countries specialize where they have a comparative advantage and trade, their efficiency and standard of living can improve
QUESTION 18 Consider the following production possibilities frontier for Debbie and Melissa Debble Donuts Donuts Melissa Coffee Coffee Moreover assume that T-266 and W-99 H-297 and Z-39 Assume there is no trade between Debbie and Melissa. Melissa spends 65% of her time producing donuts and Debbie spends the W64 of her time producing donuts What would be the world's production of donuts?
3. Gains from trade Consider two neighboring island countries called Contente and Felicidad. They each have 4 million labor hours available per month that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor. Jeans Corn Country (Pairs per hour of labor) (Bushels per hour of labor) Contente 6 12 Felicidad 4 16 Initially, suppose Contente uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn, while Felicidad uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Contente produces 6 million pairs of jeans and 36 million bushels of corn, and Felicidad produces 12 million pairs of jeans and 16 million bushels of corn. 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…
Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
21. According to David Ricardo, O A. If countries specialize where they have a comparative advantage and trade, all groups in their economies will benefit equaly OB. If countries specialize where they have a comparative advantage and trade, their efficiency and standard of living can improve O C. If countries specialize where they have an absolute advantage and trade, their efficiency and standard of living can improve O D. Countries should strive to develop their absolute advantage to benefit from trade with other countries
How does comparative advantage play a key role in specialization & trade ?
scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
The table below shows the production possibilities for Canada and Japan. Suppose that, prior to specialization and trade, both Canada and Japan are producing combination C. Product DVD players Bushels of wheat Product DVD players Bushels of wheat 100 players 80 60 A 20 0 A Canada A 40 0 B 15 20 B 30 7.5 CANADA'S PRODUCTION POSSIBILITIES C 10 40 JAPAN'S PRODUCTION HACH POSSIBILITIES C 20 15 Tools PP Curve combination Trading Possil New combina 80 E 30 0 0 E A
The following are the production schedules of village C and village D. Village C Lamps Village D Carpets Lamps Caгpets 20 10 10 5 5 10 10 20 Show how specialization and trade can benefit both Village C and Village D. In your analysis, you can assume the terms of trade are 8 lamps for 8 carpets.
01 20 wered For each fancy dress Cafilla produces, it gives up the opportunity to make 50 pounds of cheese. Bodoni can produce one fancy dress for every 100 pounds of cheese it produces. If specialization and trade were to occur between these two countries, which of the following would be consistent with the theory of comparative advantage? O a. Bodoni has the comparative advantage in only dresses. O b. Cafilla has the comparative advantage in only cheese. O c. Cafilla has the comparative advantage in only dresses. O d. Bodoni has the comparative advantage in dresses and cheese. O e. Cafilla has the comparative advantage in dresses and cheese. D AssignmentMain.do?takeAssignmentSession Locator assignment-take,0896c4f4-0518-431a-b10a-1cd73a8289c4# Show -9 bike 2 bike jpg.jpg bike 2.jpg T ▬▬ 6:5 6/12/2 ➡+ prt so R % 5 L G B O Y I & 7 x 8 l J C IAA 00 M 9 K fio ► 11 O ENG S D