Suppose the make believe economy of Tinto produces and consumes 2 goods: clothing and food. The following table shows the quantities produced and consumed, as well as nominal prices. For clarity, they produce 100 clothing per week and 400 fooi per week. They claim that they consume 50 clothing per week and 450 food per week. Produced Consumed Price Clothing100 (clothing/week)50 (clothing/week)8 ($/clothing) Food 400 (food/week) 450 (food/week) 4 ($/food) a) What do they export and what they import? How can you tell? Explain clearly and concisely. b) Using information in the table, show why it is not possible for Tinto to consume 50 clothing per week and 450 food per week. (Hint: real price)

Suppose the make believe economy of Tinto produces and consumes 2 goods: clothing and food. The following table shows the quantities produced and consumed, as well as nominal prices. For clarity, they produce 100 clothing per week and 400 fooi per week. They claim that they consume 50 clothing per week and 450 food per week. Produced Consumed Price Clothing100 (clothing/week)50 (clothing/week)8 ($/clothing) Food 400 (food/week) 450 (food/week) 4 ($/food) a) What do they export and what they import? How can you tell? Explain clearly and concisely. b) Using information in the table, show why it is not possible for Tinto to consume 50 clothing per week and 450 food per week. (Hint: real price)

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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