Figure 2: Trade and PPC Based on the Figure 2 above: a. International trade allows consumption outside the production possibility frontier b. International trade does not allow consumption outside the production possibility frontier c. Producing Z is possible if zero units of Product A are made d. Producing W is impossible

Figure 2: Trade and PPC Based on the Figure 2 above: a. International trade allows consumption outside the production possibility frontier b. International trade does not allow consumption outside the production possibility frontier c. Producing Z is possible if zero units of Product A are made d. Producing W is impossible

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: International Trade

Section: Chapter Questions

Problem 1QP

See similar textbooks

Similar questions

France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week. Draw a production possibilities frontier for each country. Hint: Remember the production possibility frontier is the maximum that all workers can produce at a unit of time which, in this problem, is a week. Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes. Identity which country has the comparative advantage. How much would France have to give up In terms of tomatoes to gain from trade? How much would it have to give up in terms of green beans?
Question 4a. What is the Production Possibility Frontier? b. How is the PPF applicable to international trade? c. Carrot Apple 0 10 1 9 2 7 3 4 4 0 Using the table above, draw the PPF for Happyland. d. Using the PPF drawn above identify the point of inefficiency and label it A. Why is this considered to be inefficient?e. Identify on the graph above the point of unattainability and label it B. Why is this considered to be unatainable?
Illustrate and explain the Production possibilities frontier (PPF)
A) Consider the Island of Uba located off the shores of South Florida. The economy of Uba produces only two goods: sugar cane (S) and consumption goods and services (CS). In the late 1950s a new revolutionary announced a policy that required all Uba’s medical doctors, engineers, teachers and research scientists to allocate half their time to working in the cane fields. Draw the PPF (Production Possibilities Frontier) for Uba (Sugar cane on the x-axis, consumption goods and services on the y-axis). Indicate where the economy of Uba was located as a result of the new revolutionary government’s policy on the diagram and explain your results. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Wat's Production Possibilities Product A B C D E F Rice 750 600 450 300 150 0 Corn 0 50 100 150 200 250 Xat's Production Possibilities Product A B C D E F Rice 2,500 2,000 1,500 1,000 500 0 Corn 0 100 200 300 400 500 The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. The mutually beneficial terms of trade will be Multiple Choice less than 2 units of rice for 1 unit of corn. greater than 4 units of rice for 1 unit of corn. between 3 and 5 units of corn for 1 unit of rice. between 3 and 5 units of rice for 1 unit of corn.
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.
Draw the production Possibility frontier from the following information (with corn production on the vertical axis) Point on ppf Total Corn Production(Millions of Bushels Per Year) Total Wheat Production (Millions of Bushels Per Year) A 700 100 B 650 200 C 510 380 D 400 500 E 300 550 Using data in the table, graph the ppf (with Corn Production on the vertical s) What happens to the opportunity cost of corn – measured in number of wheat—as corn production increases from 300 to 400 tons, from 400 to 510 tons, from 510 to 650 tons, and so on? If this country chooses to produce both corn and wheat, what will happen to the ppf over time? Why?
Although a production possibilities frontier is usually drawnfor a country, one could be drawn for the world. Picture theworld’s production possibilities frontier. Is the world positioned at a point on the PPF or below it? Give a reason foryour answer.
Suppose that a small country has a production possibility frontier (with two goods X and Y) displaying increasing opportunity costs. Suppose further that trade is beneficial and in equilibrium with trade, the country imports good X and exports good Y. Discuss how growth of labour used more intensively in the import good (X) affects the country’s welfare. Illustrate your answer with the country’s PPF diagram which shows the production and consumption equilibrium outcomes before and after growth.
What can cause the Production Possibility Frontier (PPF) to contract, that is to say, move the PPF further to the left? A) Minimum Wage B) Price Ceiling C) An increase in raw material costs needed in production D) Price Floor
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.
1. Discuss any five factors that may cause production possibility frontier (PPF) curve to shift.