Lesotho hosl00 workees, and eachcuther 20.rodios or 300 tonsof Maize, SauthCan produceAfrica has 200 workers, and cach can groducecither 50 radios of 400 tonsMaize.a) Plot cach Cofrontier and eaplain them.Coundry's production possibilitiesfind theLesotho andthemoppertunity costs of maize inSoulh Africa and ntewherpredabctemine a toundiyuren therefade,Lesathud consumesLsantho

A production possibility frontier is a curve that illustrates the maximum possible output…

Lesotha has cither 20 rodios or 300 tons of maize. South Açaica has 200 workers, and cach cangraduce cither 50 radios or 400 tons l00 workers, and each Can produce Maize a) Plot cach Countay's production possibilities frontier and eaplain them. blfind the opportunity costs of maize in Ledotho and dhem Soulh Africa and ntep pret

Lesotha has cither 20 rodios or 300 tons of maize. South Açaica has 200 workers, and cach cangraduce cither 50 radios or 400 tons l00 workers, and each Can produce Maize a) Plot cach Countay's production possibilities frontier and eaplain them. blfind the opportunity costs of maize in Ledotho and dhem Soulh Africa and ntep pret

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter2: Economics: Eight Powerful Ideas

Section: Chapter Questions

Problem 15P

See similar textbooks

Similar questions

GoupH 10 Jucpicane Who has the oabsolute advantage vn Coffee Production Inho has the absolute advantage in Suge Ppro duction Who has the Comparative aduantaçe Compe
The country Autarka does not allow international trade.In Autarka, you can buy a wool suit for 3 ounces ofgold. Meanwhile, in neighboring countries, you can buythe same suit for 2 ounces of gold. This suggests thata. Autarka has a comparative advantage inproducing suits and would become a suitexporter if it opened up trade.b. Autarka has a comparative advantage inproducing suits and would become a suitimporter if it opened up trade.c. Autarka does not have a comparative advantagein producing suits and would become a suitexporter if it opened up trade.d. Autarka does not have a comparative advantagein producing suits and would become a suitimporter if it opened up trade
Are the following staten1ents true or false? Explain ineach case.a. "1wo countries can achicv" gains from trade evenif one of the countries has an absolute advantagein the production of all goods."b. "Certain talented people have a comparativead\'antage in """'}'thing 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 mLtSt be goodfor everyone in th" country."
Are the gains from international trade more likely to be relatively more important to large or small countries?
The United States exports corn and aircraft tothe rest of the world, and it imports oil andclothing from the rest of the world. Do youthink this pattern of trade is consistent with theprinciple of comparative advantage? Why orwhy not?
Why imposing import quota on necessity products (like onion) may create grievanceamong the consumers? Explain using a suitable diagram. How may government reducethe consumers’ grievance?
Are the following statemen ts true or false? Explain ineach case.a. ''1Wo 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. ''U a certain trade is good for one person, it can'tbe good for the other one.''d. ''U a certain trade is good for one person, it isa lways good for the other o ne.''c . "U trade is good for a country, it must be goodfor everyone in the country.''
Consider the arguments for restricting trade.a. Imagine that you are a lobbyist for timber, anestablished industry suffering from low-pricedforeign competition, and you are trying to getCongress to pass trade restrictions. Which twoor three of the five arguments discussed in thechapter do you think would be most persuasiveto the average member of Congress? Explain yourreasoning.b. Now assume you are an astute student ofeconomics (not a hard assumption, we hope).Although all the arguments for restricting tradehave their shortcomings, name the two or threearguments that seem to make the most economicsense to you. For each, describe the economicrationale for and against these arguments for traderestrictions.
Two countries, Korea and Vietnam, are engaging in international trade.They produce two goods: automobiles and cloth. We observe a relativeabundance of cheap labor in Vietnam and a relative abundance of capitalin South Korea. a. Assume that automobiles are capital-intensive and cloth are cheaplabor-intensive. Using the Hecksher-Ohlin theory, explain what willhappen in trade between these two countries, in terms of export andimport. c. Draw a graph that shows the above situation in South Korean economy with a P P F and two relative prices (one before trade and theother after trade). The quantity of automobiles (QAuto) is on thehorizontal axis and the quantity of cloth (QCloth) is on the verticalaxis.
d Vew Htory Bools OPFRO TOR PM 3. Using the data in the accompanying table, answer the fol- lowing questions: Canoda Italy Points on Production Possibilities Frontier Good X Good Y Good X Good Y A. 150 100 25 60 50 50 120 75 180 a. For which good does Canada have a comparative advantage? b. For which good does Italy have a comparative advantage? c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization- trade case than in the no-specialization-no-trade case. of two Natons. shift Good XGon OPP cost 0888 888
hy would U.S. automobile manufacturingbe a target for foreign companies?
Suppose the U.S. imposes a trade embargo onNorth Korea in order to exert political pressureon the government. Consider how the embargowill affect U.S. producers. Under what conditionswould they support the embargo? Why mightthey oppose it?