1. Should these two countries trade? Why or Why not?2. Which country has the comparative advantage in producing cars? Absolute and Comparative AdvantageMotor Vehicle Production in the U.S.104123456MillionsTrucksMotor Vehicle Production in Mexico22Trucks34MillionsCarsMillionsCars Millions2.

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Description: 1. Should these two countries trade? Why or Why not?2. Which country has the comparative advantage in producing cars? Absolute and Comparative AdvantageMotor Vehicle Production in the U.S.104123456MillionsTrucksMotor Vehicle Production in Mexico22Tr

Let one assume one factor of production i.e., labour which is used in both the countries. The above…

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1. Should these two countries trade? Why or Why not? 2. Which country has the comparative advantage in producing cars?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter1: Welcome To Economics!

Section: Chapter Questions

Problem 6SCQ: Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram...

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Consider a simple economy of Korea - producing two goods, Motor bike and milk. The details ofthe economy and its production is as follows: Motor Bike (1000 / year) Milk (1000 gallons per year) 0 601 502 303 0 d) According to the (BGH) technology, farmers can now get double the amount of milk fromcows easily. In terms of PPF, this means Korean economy can now produce twice milk ateach level of bike output. With the current production of 2000 motor bikes, Mr. B claimsthat this new technology can allow this economy to produce more milk and more bikes. Doyou agree with this statement or not?e) Explain carefully, with the help of diagram and justify your answer.
Comparative Advantage Worker Wage Time to complete 1 unit Paneling Dry Wall Al ($9/hr) 6hrs 4hrs Ken ($10/hr) 5hrs 5hrs
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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.
Consider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 6. In India, how many units of corn is it willing to give-up to produce a unit of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough data 7. The US, to achieve comparative advantage in producing a unit of corn, need to give-up how many unit(s) of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough data
ackground information: A worker in the United States and a worker in China can each produce 1,000 pairs of jeans per week. A worker in the United States can produce 50 cell phones in a week, and a worker in China can produce 100 cell phones in a week. Answer the following questions based on this information.Part A: If each country attempted to produce both jeans and cell phones, how many jeans and cell phones could each country produce? What would be the total number of jeans and cell phones produced by the two countries combined? (Show your work.)Part B: Calculate the opportunity cost of producing jeans for each country. (Show your work.)Part C: Calculate the opportunity cost of producing cell phones for each country. (Show your work.)Part D: Determine how many jeans should be produced by each nation. (Show your work). Part E: If each nation should specialize in producing jeans and cell phones, explain why; use economic terminology you have learned in this unit in your…
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1.3 Using the gravity model calculate the value of trade between country I and J. You can assume: a=b=0.9, c=0.8 and A=0.5The GDP for country I is triple the GDP of country J. Country J GDP is equal to the product of the trading value of all developed countries listed in the given table. The distance between these countries is 28 km.
Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram onto a sheet of paper and then add a foreign county as a third agent. Draw a rough sketch of the flows of imports, exports, and the payment for each on your diagram.
1. The countries France and Italy produce Perfumes and Leather Coats using only labor as an input. AvailableLabor for France and Italy is 3000 and 1000 respectively. Unit of labor per Leather Coat in France is 6 units and inItaly are 2 units. France needs 2 units of labors to produce 1 bottle of Perfume and Italy needs 4 unit of labor. a) Draw the Production Possibility Curve by using relevant information. b) Which country has the comparative advantage in producing Perfume?
Consider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 1. How many units of corn will the US produce should it exhaust all its labor force to produce corns? Group of answer choices 20 16 25 Not enough data 2. How many units of corn will India produce should it exhaust 3/4s of its labor force to produce corns? Group of answer choices 20 16 25 12 3. Between the USA and India, which country has a comparative advantage in the production of automobiles? Group of answer choices India USA None of the countries Not enough data 4. How many units of automobiles will the US produce should it exhaust half of its labor force to produce automobiles? Group of answer choices 20 10 25 Not enough data 5. How many units of automobiles will India produce should it exhaust all its labor force to produce automobiles? Group of answer…
Assume that Andy and Henry, without trading with each other, will produce and consume the following number of steel bars and ketchup bottles. The Gains from Trade Without trade Person Good Production Consumption Gains from Trade Andy Steel bars 60 60 +35 Btl. Ketchup 60 60 +15 Henry Steel bars 20 20 +5 Btl. Ketchup 20 20 +5 Now, Assume that both Andy and Henry decide to specialize, and then Andy trades 25 steel bars to Henry for 75 Btls. ketchup. This outcome is shown in the table below. Compared to the result without trade, what are the gains from trade that Andy experiences when he and Henry specialize and trade? The Gains from Trade With specialization Person Good Production Consumption Gains from Trade Andy Steel bars 120 95 (keep) +35 Btl. ketchup 0 75 (from Henry) +15 Henry Steel bars 0 25 (from Andy) +5 Btl. ketchup 100 25 (keep) +5