The following graphs show the production possibilities frontiers (PPFS) for Shenandoah and Denali. Both countries produce almonds and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of almonds and 9 million pounds of basil, as indicated by the grey stars marked with the letter A.
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- Suppose there are two countries for analyses, the United States and Indonesia. Assume that 2000 man hours are available in the United States and 36000 in Indonesia. The following table provides information on how many man-hours are needed to produce one unit of the same goods. Indonesia United States Cloth 50 3 Machines 100 5 2.4 With the aid of a graph, explain why both countries benefit from trade when prices are within the range of 1.666675 cloths per machine and 2 cloths per machine.# Module Two Quiz 3. Gains from trade Suppose there exist two imaginary countries, Glacier and Sequoia. Their labor forces are each capable of supplying four million hours per day that can be used to produce = pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. € Pistachios Chinos Country (Pounds per hour of labor) (Pairs per hour of labor) 24 Glacier Sequoia 32 X 12 8 Suppose that initially Glacier uses 1 million hours of labor day to produce pistachios and 3 million hours per day to produce chinos, while Sequoia uses 3 million hours of lab per day to produce pistachios and 1 million hours per day produce chinos. As a result, Glacier produces 12 million pounds of pistachios and 72 million pairs of chinos, and Sequoia produces 24 million pounds of pistachios and 32 million pairs of chinos. Assume there are no other countrie willing to engage in trade, so, in the absence of trade betw…Q.3 Suppose the following table given below describes the production possibilities of Rice and Cloth for Pakistan and China: Wheat (Kgs/hour) Cloth (Meters/hour) PAKISTAN 5 10 CHINA 10 40 Without trade, what is the relative price of wheat in terms of cloth in Pakistan? What is the price in China? Which country has an absolute advantage in the production of each good? Which country has a comparative advantage in the production of each good? If both countries trade with each other, which good will each export? What is the range of prices at which trade can occur?
- 96 FL If Honduras and Guatemala each specialize in producing the good in which they have a comparative advantage and then trade with one another original PPF. O both countries would end up on a point to the right of their O both countries would end up at a point to the left of their one country would remain on its original PPF, while the other country would end up on a point to the right of its O both countries would end up on a different point on their Unit 7- Chapter 1...xlsx Unit 7- Chapter 1..xlsx O Topic 2 (2).docx O Topic 2 (1).docx 11:09 PM 73°F SUI prt sc delete f12 pus backspace -> unu Bock enter pause T shift alt ctrlQuestion 1: Assume there are two nations: Panama and Guatemala that produce two commodities: coconuts and passion fruits. The table below contains the amount of each commodity produced per hour of labour in the two nations in terms of Kg. Panama Guatemala Passion fruits 9 4 Соconuts 6. c) Suppose passion fruits and coconuts are exchanged internationally at a rate of 1.2 passion fruit per coconut. Which country will export coconuts and why? Assuming both countries have 180 hours of labour each, draw the PPFS of both countries to your answer and explain why both countries are better off after trade. illustrate d) Draw the world supply curve of coconuts.Comparative advantage and gains from trade Consider two neighboring island countries called Bellissima and Felicidad. They each have 4 million labor hours available per month that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. Corn Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) Bellissima 8 16 Felicidad 5 20 Initially, suppose Bellissima uses 1 million hours of labor per month to produce corn and 3 million hours per month to produce jeans, while Felicidad uses 3 million hours of labor per month to produce corn and 1 million hours per month to produce jeans. Consequently, Bellissima produces 8 million bushels of corn and 48 million pairs of jeans, and Felicidad produces 15 million bushels of corn and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between…
- Austria and Gemany only produce two goods: beer and sausages. The muaber of workers is 10 in Austria and 30 in Germany and the production possibilities frontiers for both countries are given below. Austria Gemany 600 150 Liters of beer Liters of bee 900 a) What is the ourtput of beer per unit of labor in Austria? b) / What is the output of sausages per unit of labor in Germany? I Which country has a "comparative advantage" in which product? Caleulate and explain briefly. d) production? Explain briefly. 3) Which courtry has an absolute advantage in beer production and which country in sausage sasnes jo s 东 nrs jo#3 PRICE (Dollars per tonne) cengage.com/static/nb/ui/evo/index.html?elSBN=9780357302934&snapshotld=D2741525&id3D1376796971& E CENGAGE MINDTAP Q Search thisC News Analysis: Nailing Down Metal Tariffs THIR A JA 15 ndu BILLS Consider a hypothetical example of trade in aluminum between the United States and China. For simplicity, assume that China is the only source of U.S. aluminum imports. The following graph shows the U.S. market for aluminum. Note that in the absence of any trade, the market price for aluminum in the United States is $500 per tonne, and the equilibrium quantity is 50 million tonnes per month. Use the green area (triangle symbol) to show U.S. consumer surplus under free trade with China, and use the purple area (diamond symbol) to show U.S. producer surplus under free trade with China. 0000 Domestic Demand Domestic Supply 006 Consumer Surplus 008 Producer Surplus 009 Free Trade Price 1. 06 20 08 09 QUANTITY OF ALUMINUM (Millions of tonnes per month) MacBook Air DOO F4…Countries A and B are both producers of wine and sausages. The table below shows their respective capacities for production of each of these goods should they devote all their resources to either good 1 (wine) or good 2 (sausages). With reference to relevant theories of trade (absolute advantage/relative advantage), explain which country should concentrate on production of which good(s). Country A:wine 10,000sausages 20,000 Country B:wine 6,000sausages 10,000
- 24. The table below presents the number of workers it takes to produce 10 Headphones and 10 Tablets in the countries of Greatstown and Minitown. Country Headphones (workers per 10 units) Tablets (workers per 10 units) Greatstown 4 2 Minitown 7.1 8.1 Does Minitown have a comparative advantage in the production of Headphones? OYes ONO Does Minitown have a comparative advantage in the production of Tablets? OYes ONO Does Minitown export Headphones? Olt should export Headphones Olt should export Tablets Olt should not trad. An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes. Assume that the two countries trade and that the country importing coffee trades 2 ounces of soybeans for 1 ounce of coffee. Explain why both countries will benefit from this trade.The table below shows how many millions of cars and trucks each country can produce in one year. Based on the information, which of the following is true? Maximum Country Country outputs A B CARS 30 m 35 m TRUCKS 6 m 21 m Copyright: www.economicsonline.co.uk Country A has the comparative advantage in trucks Country B has the comparative advantage in cars Country A has the comparative advantage in cars Country A has the absolute advantage in cars