Assume a Ricardian, constant-cost world. There are two countries, the United States and Canada. Each country can produce cameras and milk. The table below shows production per man-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500 workers. a) Graph the world supply curve for cameras. b) Show a possible world demand curve and price (assuming that both countries completely specialize).

Assume a Ricardian, constant-cost world. There are two countries, the United States and Canada. Each country can produce cameras and milk. The table below shows production per man-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500 workers. a) Graph the world supply curve for cameras. b) Show a possible world demand curve and price (assuming that both countries completely specialize).

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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Assume a Ricardian, constant-cost world. There are two countries, the United States andCanada. Each country can produce cameras and milk. The table below shows production perman-hour for each country. US Canada cameras 6 2 milk 1 2 The United States has a labor force of 1,000 workers, and Canada has a labor force of 500workers.a) Graph the world supply curve for cameras.b) Show a possible world demand curve and price
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.
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.
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…
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?
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
ONLY D AND E 20. Muriel and Edgar each have 30 labor hours available per week to knit hats and scarves. In 30 hours, Muriel can knit 6 hats or 4 scarves. In the same amount of time, Edgar can knit 3 hats or 5 scarves. a. Draw the production possibilities frontiers for Muriel and Edgar, with scarves on the x-axis. b. Who has the absolute advantage in scarf production? In hat production? c. Find Muriel’s and Edgar’s opportunity cost of producing hats in terms of scarves. Who has a comparative advantage? d. Find Muriel’s and Edgar’s opportunity cost of producing scarves in terms of hats. Who has a comparative advantage? e. Muriel and Edgar are now aware of their comparative advantages and decide to trade. For what price of hats (in terms of scarves) will trade occur? Explain.
2-6 ONLY ANSWER CD Suppose County A and B produce only paper and cars. Country A can produce 8 tons of paper or 4 million cars yearly. Country B can produce 25 tons of paper or 5 million cars yearly. Draw the production possibilities frontier for each country. 2. Both countries want 2 million cars each year and as much paper as they can produce along with 2 million cars. Find this point on each production possibilities frontier and label it “X1.” C. Suppose the countries specialize. Which country will produce cars? D. Once they specialize, suppose they work out a trade of 2 million cars for 6 tons of paper. Find the new consumption point for each country and label it “X2.”
1.1 Discuss how the production possibility frontier model can be used to illustrate thebasic economic problem of scarcity.
Explain Production possibility frontier with an example and give explanation on why it is represented as a curved diagram(concave)
The Marope Economy has the capacity to produce the goods and services that are outlined in Table 1 below. You are required to:a. Draw a Production Possibility Frontier (PPF) and list all efficient points of production.b. Marope Economy wishes to produce 520 billion units of consumer goods. Plot this output onthe Frontier and state whether this is an efficient point or not.Table 1 – Production Possibilities Output (billions of units per year) Consumer goods Consumer servicesPart BA B480 420 0 120C D240 0 240 300 Use graphs to demonstrate how the following factors will change the PPF.a. A decrease in migrationb. An increase in natural resourcesc. Changes in technology
What does it mean by a linear production possibility frontier?