Imagine the following case study where two different countries: Albania and Belize have remained self-sufficient and mostly produce two of the following products: corn and beets. Our hopes are that we will be able to improve trade liberalization and encourage each one to work together in order to improve the number of resources and goods each one provides to their population. Here are their production levels for each product per worker/month (assume each country has a workforce for 15 workers): Bushels Corn (Y-axis) Вeets (X-аxis) Albania 40 20 Belize 20 4 a) Calculate and graph the Production possibilities frontiers for both countries. b) Assume that both countries currently prefer equal amounts of corn and beet for their production & consumption levels within their country, clearly label this point and call it point B: production/consumption before trade. c) Calculate and state the number of workers that would be required in order to produce points B for both countries.

Imagine the following case study where two different countries: Albania and Belize have remained self-sufficient and mostly produce two of the following products: corn and beets. Our hopes are that we will be able to improve trade liberalization and encourage each one to work together in order to improve the number of resources and goods each one provides to their population. Here are their production levels for each product per worker/month (assume each country has a workforce for 15 workers): Bushels Corn (Y-axis) Вeets (X-аxis) Albania 40 20 Belize 20 4 a) Calculate and graph the Production possibilities frontiers for both countries. b) Assume that both countries currently prefer equal amounts of corn and beet for their production & consumption levels within their country, clearly label this point and call it point B: production/consumption before trade. c) Calculate and state the number of workers that would be required in order to produce points B for both countries.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 1CQQ

See similar textbooks

Similar questions

What is intra-industry trade?
35. What are the conditions necessary for international trade to be mutually beneficial? a) absence of fraud and coercion b) reciprocal trade, meaning imports must also generate exports c) balance of trade, meaning the value of imports must equal the value of exports d) the trading parties must have different production possibilities frontiers e) trading parties must be able to calculate their costs and benefits  f) each country must be exporting the good in which it has an absolute advantage g) each country must specialize in the good of which it is the more efficient producer h) the trade does not cause some jobs to move to the other country
Economics - International Trade Q: In figure 2.6, a positively sloped curve is drawn to show the foreign supply of exports of food rising as the price of food rises. How can this response be reconciled with the assumption that each nation’s endowment supply of commodities is fixed with respect to price?
10 24. Suppose a small country experiences economic growth that leads to an increased willingness to trade. The country's terms of trade will _____ because the prices of its exports will_____ relative to the price that it has to pay for its imports.
3-What impacts, if any, the imposition of tariffs have on a nation’s Terms of Trade?
The US exports $10 billion worth of inorganic chemicals to Germany and imports inorganic chemicals from Germany for the same dollar amount. Japan imports $1 billion of garments from Indonesia, but does not export any to Indonesia. The measure of intra-industry trade between Germany and the US first, and between Japan and Indonesia second are respectively... a. 0.5 and 0.5 b. 1 and 0 c. -1 and 1 d. 0 and 1
1. Give an example of a positive impact that an international Firm can have on a foreign country's economy.
Statement 1: One of several World Trade Organization's primary missions is to promote improved living standards, job growth, and social and economic development and progress. Statement 2: The United Nations is usually considered as the lender of last resort for nations with troubled economies. Statement 3: World Bank is responsible for policing the fair international trade. O Statement 1 is correct but statements 2 and 3 are incorrect. O Statement 3 is correct but statements 1 and 2 are incorrect. © Statement 1 is incorrect but statements 2 and 3 are correct. O All statements are correct. O All statements are incorrect.
QUESTION 1.Consider two countries: South Korea and New Zealand and two goods: Lamb and Air Pumps. South Koreaimports $210 million worth of lamb from New Zealand and exports $10 million worth of lamb to New Zealand.On the other hand, New Zealand imports $60 million worth of air pumps from South Korea and exports $20million worth of air pumps to South Korea. What is the inter-industry trade measure between these two countries?(a) 2/3.(b) 1/5.(c) 4/5.(d) 1/3. Explain why.
6-Look at a country’s Terms of Trade (T.O.T.). It is assumed that when the T.O.T. value increases the country’s wellbeing goes up, and when the T.O.T. value declines, the country’s wellbeing is reduced. Do you agree??? Explain!!! Among others you stated: “Trade between countries highly depends upon terms of trade. T.O.T. has important effects on the balance of payments or on its economic growth so the T.O.T. is used to measure the wellbeing of the country.” Further down though…you refute your previous statement by saying: “But T.O.T. should not be used to calculate wellbeing as its calculation does not show the volume of export of the country, only shows relative changes between countries….”etc.
1. What will a diagram look like if we assume increasing returns of scale for two countries trading with each other? 2. Visualize a diagram which portrays a high inelastic export situation of a large country and declining terms of trade?
16. Suppose the US imposes trade barriers against Peru’s exports, and Peru charges the US with violating WTO rules. A WTO dispute settlement panel then decides that the US is guilty of violating the rules. Why might the existence of the WTO dispute settlement system make the US more likely to reverse its policies (i.e., remove the trade barriers against Peru)? Put differently, how does the existence of this institution change the US calculus compared with the non-institution counterfactual?