1. A nation with fixed quantities of resources is able to produce any of the following combinations of carpet and carpet looms: Yards of Carpets Carpet Looms (Thousands) (Millions) 47 13 45 26 38 39 28 52 17 65 These figures assume that a certain number of previously produced looms are available in the current period for producing carpet. a. Using data in the table, graph the ppf (with carpet Looms on the vertical axis) b. What happens to the opportunity cost of carpets measured in number of looms-as carpet production increases? c. If this country chooses to produce both carpets and looms, what will happen to the ppf over time? Why?

1. A nation with fixed quantities of resources is able to produce any of the following combinations of carpet and carpet looms: Yards of Carpets Carpet Looms (Thousands) (Millions) 47 13 45 26 38 39 28 52 17 65 These figures assume that a certain number of previously produced looms are available in the current period for producing carpet. a. Using data in the table, graph the ppf (with carpet Looms on the vertical axis) b. What happens to the opportunity cost of carpets measured in number of looms-as carpet production increases? c. If this country chooses to produce both carpets and looms, what will happen to the ppf over time? Why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 29P: France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting...

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Table 33.15 shows how the average costs of production for semiconductors (the chips In computer memories) change as the quantity of semiconductors built at that factory increases. Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale? If the equilibrium quantity of semiconductors demanded is 90,000, can this economy take full advantage of economies of scale? What about if quantity demanded is 70,000 semiconductors? 50,000 semiconductors? 30,000 semiconductors? Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.
Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
A nation with fixed quantities of resources is able toproduce any of the following combinations of carpet andcarpet looms:Yards of carpet(Millions)Carpet looms(Thousands)0 4512 4224 3636 2748 1560 0These figures assume that a certain number of previouslyproduced looms are available in the current period forproducing carpet.a. Using the data in the table, graph the ppf (with carpet onthe vertical axis).b. Does the principle of “increasing opportunity cost” holdin this nation? Explain briefly. (Hint: What happens tothe opportunity cost of carpet—measured in number oflooms—as carpet production increases?)c. If this country chooses to produce both carpet and looms,what will happen to the ppf over time? Why?Now suppose that a new technology is discovered thatallows an additional 50 percent of yards of carpet to beproduced by each existing loom.d. Illustrate (on your original graph) the effect of this newtechnology on the ppf.e. Suppose that before the new technology is introduced, thenation…
Table 1: Production Capacity of COVID-FREE LAND.Use information in Table 1 above to answer the following questions:a. Using the above figures, graph the production possibilities Frontier (PPF) of COVI_LAND b. In your own words, while making use of the graph that you have created in part a, explain what the PPF is. Cleary state all assumptions and properties of the PPF. c. Normally, the people of COVID-FREE LAND demand of 3,000 sanitizers and 18,000 toilet rolls. Suddenly, there is outbreak of COVID-19 and the demand for sanitizers and toilet rolls increased to 4,000 and 20,000, respectively. How would COVID-FREE LAND meet its new demand. Identify and comprehensively discuss at least three possibilities or ways. (Hint: State any appropriate assumptions made) toilet paper sanitizers 30000 0 28000 1000 24000 2000 18000 3000 10000 4000 0 5000
A nation with fixed quantities of resources is able to produce any of the following combinations of bread and ovens:Bread (tons) Oven (000’s)60 050 1240 2230 3020 3610 40 0 42These figures assume that a certain number of previously produced ovens are available in the current period for baking bread.a. Using data in the table, graph the ppf (with ovens on the vertical axis)b. What happens to the opportunity cost of bread – measured in number of ovens—as bread production increases from 0 to 10 tons, from 10 to 20 tons, from 20 to 30 tons, and so on?c. If this country chooses to produce both bread and ovens, what will happen to the ppf over time? Why? Select one:a. Remains stagnant b. Decline over time towards inefficiencyc. Increase over time and declined. Increase over time towards growth
France and Tunisia both have Mediterraneanclimates that are excellent for producing/harvestinggreen beans and tomatoes. In France it takes two hoursfor each worker to harvest green beans and two hours toharvest a tomato. Tunisian workers need only one hourto harvest the tomatoes but four hours to harvest greenbeans. Assume there are only two workers, one in eachcountry, and each works 40 hours a week.a. Draw a production possibilities frontier for eachcountry. Hint: Remember the productionpossibility frontier is the maximum that allworkers can produce at a unit of time which, inthis problem, is a week.b. Identify which country has the absoluteadvantage in green beans and which country hasthe absolute advantage in tomatoes.c. Identify which country has the comparativeadvantage.d. How much would France have to give up interms of tomatoes to gain from trade? How muchwould it have to give up in terms of green beans?
Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive resources and technology and employing all its productive resources to the maximum. The maximum output combinations of both goods are given in the table below: Combination Shoes Computers Shoes Computers A 0 1000 B 100 900 C 200 750 D 300 550 E 400 300 F 500 0 iv. How many computers could society produce if it was willing to do without shoes? v. Why are points outside the frontier unattainable? vi. Identify three ways by which the economy can attain the level of production outside the PPF. vii. What happens to the PPF when technological change overwhelmingly favours the production…
Table 1: Production Capacity of COVID-FREE LAND.Toilet Rolls 30,000 28,000 24,000 18,000 10,000 0Sanitizers 0 1,000 2,000 3,000 4,000 5,000Use information in Table 1 above to answer the following questions:a. Using the above figures, graph the production possibilities Frontier (PPF) of COVID_FREELAND (Hint! Use Microsoft Excel, for accuracy)b. In your own words, while making use of the graph that you have created in part a, explain what the PPF is. Cleary state all assumptions and properties of the PPF. c. Normally, the people of COVID-FREE LAND demand of 3,000 sanitizers and 18,000 toilet rolls. Suddenly, there is an outbreak of COVID- 19 and the demand for sanitizers and toilet rolls has increased to 4,000 and 20,000, respectively. How would COVID-FREE LAND meet its new demand. Identify and comprehensively discuss at least three possibilities or ways. State all appropriate assumptions made.
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.
11. If Portugal has a total of 180 man-hours of resources available for production, while England has only 120, what are the resource costs of wine and cloth? a) wine costs 2 man-hours/bottle and cloth 6 man-hours/yard in Portugal. b) wine costs 1 man-hour/bottle and cloth is 1 man-hour/yard in England. c) cloth costs 4 man-hours/yard and wine 2 man-hours/bottle in Portugal. d) wine costs 1/2 yards/bottle and cloth 2 bottles/yard in Portugal.
(b) Discuss this normative statement: “Governments should use targeted industry policy to assist specific firms, and industries achieve sustainable competitive advantage”.
What is the Production–possibility frontier curve? Explain it in reference of before Specialization and trade.