The table below shows the monetary value of the Turkey and Zimbabwe. Use It to answer questions regarding a possible trade scenario between the two natlons. Year - 2019 Gems in biltions of USD Steel in billions of USD Zimbabwe 0.2 10 Turkey Using Ricardian logic, can Zimbabwe and Turkey trade either gems or steel with each other, and mutually benefit? Yes, Zimbabwe should specialize in gems, and Turkey should produce more steel than gems, and then trade its extra steel to Zimbabwe. O a No, neither nation has a comparative advantage in either the production of steel or gems, so therefore neither can benefit from trade. O b Yes, Turkey should specialize in gems, and Zimbabwe should produce more steel than gerns, and then trade its extra steel to Zimbabwe.

The table below shows the monetary value of the Turkey and Zimbabwe. Use It to answer questions regarding a possible trade scenario between the two natlons. Year - 2019 Gems in biltions of USD Steel in billions of USD Zimbabwe 0.2 10 Turkey Using Ricardian logic, can Zimbabwe and Turkey trade either gems or steel with each other, and mutually benefit? Yes, Zimbabwe should specialize in gems, and Turkey should produce more steel than gems, and then trade its extra steel to Zimbabwe. O a No, neither nation has a comparative advantage in either the production of steel or gems, so therefore neither can benefit from trade. O b Yes, Turkey should specialize in gems, and Zimbabwe should produce more steel than gerns, and then trade its extra steel to Zimbabwe.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 1CQQ

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Similar questions

What factors does Paul Krugman identity that supported expanding international trade in the 1800s?
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.
If trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.
Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Explain why such a statement is economically impossible.
If the removal of trade banters is so beneficial to international economic growth, why would a nation continue to restrict trade on some imported or exported products?
In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10 tons of rubber or 40 radios. Who has the absolute advantage in the production of rubber or radios? How can you tell? Calculate the opportunity cost of producing 80 additional radios in Japan and in Malaysia. (Your calculation may involve fractions, which is fine,) Which country has a comparative advantage in the production of radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan and in Malaysia. Which country has a comparative advantage in producing rubber? In this example, does each country have an absolute advantage and a comparative advantage in the same good? In what product should Japan specialize? In what product should Malaysia specialize?
If opening up to free trade would benefit a nation, then why do nations not just eliminate their trade barriers, and not bother with international trade negotiations?
Does intra-industry trade contradict the theory of comparative advantage?
Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is economy in an economy that performs poorly. What key factor or factors are making the difference in the outcome that results from a trade surplus?
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?