Assume Nebraska and Virginia each have 100 acres of farmland. The following table gives hypothetical figures for yield per acrein the two states: Suppose the two states decide that they want to produce 900 total units of wheat. What is the maximumamount of cotton that they could produce?Nebraska10WheatCotton 7270 units of cotton520 units of cotton720 units of cotton570 units of cottonNone of theseVirginia52

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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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6. Given that Nathan has 10 acres and can grow 15 bales of hay or 40 bushels of corn on anacre, while Simon has 10 acres and can grow 20 bales of hay or 35 bushels of corn per acre a. What is the maximum amount of corn and hay that they can jointly produce?b. Does Nathan have a comparative advantage in growing hay?c. Does Simon have an absolute advantage in growing hay?d. What is the opportunity cost to Nathan of one bale of hay?
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.
The following table describes the production possibilities of two cities in the country: CityPairs of Red Socks perWorker per HourPairs of White Socksper Worker per HourBoston 3 3Chicago 2 1 City Pairs of Red Socks per Worker per Hour Pairs of White Socks per Worker per Hour Boston 3 3 Chicago 2 1 a. Which city has an absolute advantage in the production of each color sock? Which city has acomparative advantage in the production of each color sock?b. If the cities trade with each other, which color sock will each export?c. What is the range of prices at which trade can occur? year price of milk quantity of milk price of honey quantity of honey 2016 $1 100 quarts $2 50 quarts 2017 1 200 2 100 2018 2 200 4 100 a) Compute nominal GDP, real GDP, and the GDP deflator for each year, using 2016 as thebase year. b) Compute the percentage change in nominal GDP, real GDP, and the GDP deflator in 2017 and 2018 from the preceding year. For each year, identify the variable…
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
Kenji and Paolo are considering contributing toward the creation of a building mural. Each can choose whether to contribute $300 to the building mural or to keep that $300 for a new suit. Since a building mural is a public good, both Kenji and Paolo will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.70 of benefit. For example, if both Kenji and Paolo choose to contribute, then a total of $600 would be contributed to the building mural. So, Kenji and Paolo would each receive $420 of benefit from the building mural, and their combined benefit would be $840. This is shown in the upper left cell of the first table. Since a new suit is a private good, if Kenji chooses to spend $300 on a new suit, Kenji would get $300 of benefit from the new suit and Paolo wouldn't receive any benefit from Kenji's choice. If Kenji still spends $300 on a new suit and Paolo chooses to contribute $300 to the…
[MUST SHOW WORKI You and your friend Tom are stranded on a deserted island and need to survive by collecting firewood and fishing for food. You can collect 8 logs per hour or 200 calories of fish per hour. Your friend Tom can collect 3 logs per hour or 500 calories of fish per hour. Who has an absolute advantage in collecting firewood? Select one: O A. Both You and Tom. O B. Neither You nor Tom. O C. You. O D. Tom. O E. Impossible to calculate without more information.
Review the numbers for Canada and Venezuelafrom Table 33.12 which describes how many barrelsof oil and tons of lumber the workers can produce. Usethese numbers to answer the rest of this question.a. Draw a production possibilities frontier for eachcountry. Assume there are 100 workers in eachcountry. Canadians and Venezuelans desire bothoil and lumber. Canadians want at least 2,000tons of lumber. Mark a point on their productionpossibilities where they can get at least 3,000tons.b. Assume that the Canadians specializecompletely because they figured out they havea comparative advantage in lumber. They arewilling to give up 1,000 tons of lumber. Howmuch oil should they ask for in return for thislumber to be as well off as they were with notrade? How much should they ask for if theywant to gain from trading with Venezuela? Note:We can think of this “ask” as the relative price ortrade price of lumber.c. Is the Canadian “ask” you identified in (b) alsobeneficial for Venezuelans? Use the…
Beth and Eleanor are considering contributing toward the creation of a building mural. Each can choose whether to contribute $400 to the building mural or to keep that $400 for a weekend getaway. Since a building mural is a public good, both Beth and Eleanor will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.60 of benefit. For example, if both Beth and Eleanor choose to contribute, then a total of $800 would be contributed to the building mural. So, Beth and Eleanor would each receive $480 of benefit from the building mural, and their combined benefit would be $960. This is shown in the upper left cell of the first table. Since a weekend getaway is a private good, if Beth chooses to spend $400 on a weekend getaway, Beth would get $400 of benefit from the weekend getaway and Eleanor wouldn't receive any benefit from Beth's choice. If Beth still spends $400 on a weekend getaway and…
The table below presents production schedule of apples and bananas in the country of mistania - assume that these are the only two goods that Mistania produces. Each row represents a specific set of apples and bananas that Mistania could produce. Suppose Mistania was currently at Senario C, producing 10 bananas and 80 apples. According to the data in this table, if Mistania wanted to produc 1 more banana, how many fewer apples will it need to produce? Scenario Bananas Apples A 0 100 B 5 90 C 10 80 D 15 70 E 20 60
Hubert and Manuel are considering contributing toward the creation of a water fountain. Each can choose whether to contribute $300 to the water fountain or to keep that $300 for a cell phone. Since a water fountain is a public good, both Hubert and Manuel will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.70 of benefit. For example, if both Hubert and Manuel choose to contribute, then a total of $600 would be contributed to the water fountain. So, Hubert and Manuel would each receive $420 of benefit from the water fountain, and their combined benefit would be $840. This is shown in the upper left cell of the first table. Since a cell phone is a private good, if Hubert chooses to spend $300 on a cell phone, Hubert would get $300 of benefit from the cell phone and Manuel wouldn't receive any benefit from Hubert's choice. If Hubert still spends $300 on a cell phone and Manuel chooses to…
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?
Juanita and Neha are considering contributing toward the creation of a water fountain. Each can choose whether to contribute $300 to the water fountain or to keep that $300 for a weekend getaway. Since a water fountain is a public good, both Juanita and Neha will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.70 of benefit. For example, if both Juanita and Neha choose to contribute, then a total of $600 would be contributed to the water fountain. So, Juanita and Neha would each receive $420 of benefit from the water fountain, and their combined benefit would be $840. This is shown in the upper left cell of the first table. Since a weekend getaway is a private good, if Juanita chooses to spend $300 on a weekend getaway, Juanita would get $300 of benefit from the weekend getaway and Neha wouldn't receive any benefit from Juanita's choice. If Juanita still spends $300 on a weekend getaway…