42. In Canada, one labour hour can produce 6 bagels or 24 chairs In the United States, onecomparative advantage in deciding what to produce and trade with Canada at a trade priceabour hour can produce 14 bagels or 19 chairs. Suppose the United Stateates, onecome chairs per bagel. For every, 36 units of the goods the United States produces antrade, what is the gains from trade in terms of the other goods?Answer:Units.IDO NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL ANSWER ENTERYOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES, AND NO SEPARATOR FORTHOUSANDS).

Production possibilities of Canada United States Bagels 6 14 Chairs 24 19 Opportunity cost…

42. In Canada, one labour hour can produce 6 bagels or 24 chairs In the United States, one comparative advantage in deciding what to produce and trade with Canada at a trade price labour hour can produce 14 bagels or 19 chairs. Suppose the United States follows its of 3.8 chairs per bagel. For every, 36 units of the goods the United States producerice trade, what is the gains from trade in terms of the other goods? Units. Answer: 0O NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL ANSWER, ENTER VOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES, AND NO SEPARATOR FOR THOUSANDS).

42. In Canada, one labour hour can produce 6 bagels or 24 chairs In the United States, one comparative advantage in deciding what to produce and trade with Canada at a trade price labour hour can produce 14 bagels or 19 chairs. Suppose the United States follows its of 3.8 chairs per bagel. For every, 36 units of the goods the United States producerice trade, what is the gains from trade in terms of the other goods? Units. Answer: 0O NOT ROUND YOUR CALCULATIONS UNTIL YOU REACH THE FINAL ANSWER, ENTER VOUR RESPONSE ROUNDED TO TWO DECIMAL PLACES, AND NO SEPARATOR FOR THOUSANDS).

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 2PA

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Similar questions

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.
What is comparative advantage?
What is absolute advantage? What is comparative advantage?
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.
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.
How does comparative advantage lead to gains from trade?