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 Still using the matrix above, let us assume that in an autarkic economy, the US can produce and consume 8 units of corn and 11 units of automobile; India can produce and consume 14 units of corn and 7 units of auto mobile. After deciding to engage in international trade, both countries agreed to trade 15 units of corn and 12 units of automobiles. 8. How many units of corn will the USA sell to gain from the trade? Group of answer choices 12 15 8 10 9. How many units of corn will the US gain from the trade? Group of answer choices 1 2 3 4 10. How many units of automobile will the US buy to gain from the trade? Group of answer choices 10 12 15 18 11. How many units of automobile should each country agree to trade with each other if India will gain nothing from the trade? Group of answer choices 17 13 15 12

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 Still using the matrix above, let us assume that in an autarkic economy, the US can produce and consume 8 units of corn and 11 units of automobile; India can produce and consume 14 units of corn and 7 units of auto mobile. After deciding to engage in international trade, both countries agreed to trade 15 units of corn and 12 units of automobiles. 8. How many units of corn will the USA sell to gain from the trade? Group of answer choices 12 15 8 10 9. How many units of corn will the US gain from the trade? Group of answer choices 1 2 3 4 10. How many units of automobile will the US buy to gain from the trade? Group of answer choices 10 12 15 18 11. How many units of automobile should each country agree to trade with each other if India will gain nothing from the trade? Group of answer choices 17 13 15 12

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 6SCQ: Table 33.15 shows how the average costs of production for semiconductors (the chips In computer...

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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.
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 Still using the matrix above, let us assume that in an autarkic economy, the US can produce and consume 8 units of corn and 11 units of automobile; India can produce and consume 14 units of corn and 7 units of auto mobile. After deciding to engage in international trade, both countries agreed to trade 15 units of corn and 12 units of automobiles. How many units of automobile should each country agree to trade with each other if India will gain nothing from the trade? Group of answer choices 17 13 15 12
Suppose that in a year Indonesia can produce either 50 million tonnes of petrol or 20 million tonnes of iron or any linear combination, for example, 25 million tonnes of petrol and 10 million tonnes of iron. Also suppose that in a year Australia can produce either 80 million tonnes of petrol or 64 million tonnes of iron or any linear combination, for example, 20 million tonnes of petrol and 48 million tonnes of iron. e. Suppose Australia wants 30 million tonnes of petrol and Indonesia wants 20 million tonnes of petrol and as much iron as they can get. Show that Indonesia and Australia can have more iron while still meeting their petrol requirements when they specialise and trade than when they do not. 2
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
In a world where the only goods are cell phones and cereal: Jennereelam can produce: 80m kilos of cereal, and 200k cell phones, while Jonathannadu can produce: 30m kilos of cereal, and 15k cell phones. Even though Jennereelam is a bigger economy and can produce more of each product than Jonathannadu, this guy named Ricardo insists that they will both benefit if they trade. What is Ricardo's argument called, and why does he make the claim?
Two countries, Korea and Vietnam, are engaging in international trade.They produce two goods: automobiles and cloth. We observe a relativeabundance of cheap labor in Vietnam and a relative abundance of capitalin South Korea. a. Assume that automobiles are capital-intensive and cloth are cheaplabor-intensive. Using the Hecksher-Ohlin theory, explain what willhappen in trade between these two countries, in terms of export andimport. c. Draw a graph that shows the above situation in South Korean economy with a P P F and two relative prices (one before trade and theother after trade). The quantity of automobiles (QAuto) is on thehorizontal axis and the quantity of cloth (QCloth) is on the verticalaxis.
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.
What is the trade balance between the U.S. and China from 2018 to 2020?Graph the year and trade balance (exports – imports) using year for horizontal axis and trade balance for vertical axis. What is the difference between absolute advantage and comparative advantage? Which among these 2 concepts is the basis of trade? Suppose that an American worker can produce 1000 shirts or 200 computers, while a Chinese worker can produce 1000 shirts or 100 computers.In the US, what is the opportunity cost of producing an additional shirt (measured in terms of foregone computers)?
mya and Donovan produce two goods in an 8 hour day. Mya can produce 10 capital or 55 consumables and Donovan can produce 75 capital or 60 consumables. who has the absolute advantage in the production of capital goods
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked “Increase in Consumption”). Euphoria Bellissima Jeans Rye Jeans Rye (Millions of pairs) (Millions of bushels) (Millions of pairs) (Millions of bushels) Without Trade Production 15 20 8 48 Consumption 15 20 8 48 With Trade Production Trade action Consumption Gains from Trade Increase in Consumption
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.Production in this economy is subjected to the law of diminishing marginal returns and resourcesare assumed to be fully optimized. In addition, the cost of sacrificing shoes for computers andvice versa is 1. On the basis of the foregoing assumptions, answer the following questions: What happens to the PPF when technological change overwhelmingly favours the production of computers?
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…