What would be the relative price of two traded goods for both trading partners to benefit? Select one: a. Lower than both countries opportunity costs. b. The difference of the two opportunity costs. c. Higher than both countries opportunity costs. d. The sum of the two opportunity costs. e. Between the two opportunity costs.

What would be the relative price of two traded goods for both trading partners to benefit? Select one: a. Lower than both countries opportunity costs. b. The difference of the two opportunity costs. c. Higher than both countries opportunity costs. d. The sum of the two opportunity costs. e. Between the two opportunity costs.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter2: Scarcity And Opportunity Costs

Section: Chapter Questions

Problem 4E

See similar textbooks

Similar questions

Two countries, Pakistan and India, produce two commodities: apples and mangoes. The amount of each commodity produced per hour, in kg, for Pakistan is: 6 apples, and 6 mangoes. Meanwhile, it is 5 apples and 4 mangoes for India. a.) What is the opportunity cost for mangoes in the two countries? How does it differ from relative price? Explain.
a.) Looking at the graphs, which nation has a stronger preference for 'Y'? Explain. b.) Looking at the graphs, which nation has comparative advantage in producing good 'X'. Why? c.) What do the points A and A' on the graphs represent? Explain.
Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production it is 2. Graph Home’s production possibility frontier. What is the opportunity cost of apples in terms of bananas? In the absence of trade, what would be the price of apples in terms of bananas? Why?
Production Possibilities Frontier Step 1: Draw the Y and X axes and number the units. Step 2: Label the Y and X axes and title the graph. Step 3: Plot the production combinations. Step 4: Draw the curve. Step 5: Note the opportunity cost of each variable in terms of the other.
Combination Bananas metric tons (X axis) Coffee metric tons (Y axis) A 20,000 0 B 18,000 11,000 C 14,000 20,000 D 8,000 27,000 E 0 30,000 What is the opportunity cost (amount & item) of the first 11,000 tons of coffee produced? ______________________ What is the opportunity cost (amount & item) of increasing production from 11,000 tons of coffee to 20,000 tons of coffee ? ________________ What is the opportunity cost (amount & item )of increasing production from 20,000 tons of coffee to 27,000 tons of coffee? ____________
Two countries, Pakistan and India, produce two commodities: apples and mangoes. The amount of each commodity produced per hour, in kg, for Pakistan is: 6 apples, and 6 mangoes. Meanwhile, it is 5 apples and 4 mangoes for India. a.) What is the opportunity cost for mangoes in the two countries? How does it differ from relative price? b.) What is the principle of comparative advantage? Which country has comparative advantage in apples? c.) Suppose that apples and mangoes are exchanged internationally at a rate of 0.9 mangoes per apple. Which country will export apples and why? Assuming both countries have 180 hours of labour each, draw the PPFs of both nations to illustrate the answer, and explain why both countries are better off after the trade.
Q)choose correct option, When a country has a comparative advantage in producing a certain good, A: the country should import that good. B: the country should produce just enough of that good for its own consumption. C:the country’s opportunity cost of that good is high relative to other countries’ opportunity costs of that same good. D: then specializing in the production of that good and trading for other goods could allow that country to consume at a point beyond its production possibilities frontier
The opportunity cost of moving from point H to point G in the above picture is (specify amount and good, ie: 5009 guns)
The principle of comparative advantage does not provide answers to certain questions. One of those questions is Do specialization and trade benefit more than one party to a trade? Is it absolute advantage or comparative advantage that really matters? How are the gains from trade shared among the parties to a trade? Is it possible for specialization and trade to increase total output of traded goods?
Given that Sandy can produce 10 economics reports or 2 sales calls and Tim can produce 2 economics reports or 1 sales call, which of the following would NOT be a mutually agreeable terms of trade for Sandy and Tim? a) 1 economics report for 1 sales call b) 1 sales call for 4 economics reports c) 1 economics report for 1/4 of a sales call d) 1 sales call for 3 economics reports
Bill and Fred bake cakes and pies. Bill's opportunity cost of baking 1 pie is 5 cakes. Fred's opportunity cost of baking 1 pie is 7 cakes. If both parties are to benefit from trade then we can expect 1 pie to sell for: