MICROECONOMICS (LOOSELEAF)-W/CONNECT
21st Edition
ISBN: 9781260430608
Author: McConnell
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 10DQ
To determine
Total savings of goods due to imports.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
P1. Let’s assume there are only 2 countries that produce 2 good. More specifically, suppose that the United States (US) and the United Kingdom (UK) each have 2 units of productive resources, 1 used to produce Wine, the other Cloth. The US can produce 40 units of Wine with 1 unit of productive resources and 40 units of Cloth with 1 unit of productive resources. The UK can produce 20 units of Wine with 1 unit of productive resources and 10 units of cloth with 1 unit of productive resources. Using this information, please answer the questions below:
1. What are the gains from trade?
2. What is the “range” of potential exchange rates between US and UK?
P1. Let’s assume there are only 2 countries that produce 2 good. More specifically, suppose that the United States (US) and the United Kingdom (UK) each have 2 units of productive resources, 1 used to produce Wine, the other Cloth. The US can produce 40 units of Wine with 1 unit of productive resources and 40 units of Cloth with 1 unit of productive resources. The UK can produce 20 units of Wine with 1 unit of productive resources and 10 units of cloth with 1 unit of productive resources. Using this information, please answer the questions below:
*Who has an absolute advantage in the production of Wine? Cloth?
*Who has a comparative advantage in the production of Wine? Cloth?
*Given specialization, what is production before trade? After trade?
*What are the gains from trade?
*What is the “range” of potential exchange rates between US and UK?
P2. Suppose that in Japan, without a tariff 10,000 cars will be sold per year at an equilibrium price of $20,000. With a $5,000 tariff,…
Given that Sandy can produce 10 economics reports or make 2 sales calls and Tim can produce 2 economics reports or make 1 sales call, we can conclude that,
a) Tim should produce both economics reports and sales calls.
b) Sandy should specialize in economics reports, and Tim should specialize in sales calls.
c) Tim should specialize in producing economics reports, and Sandy should specialize in producing sales calls.
d) Sandy should produce both economics reports and sales calls since she cannot possibly gain from trade with Tim
Chapter 1 Solutions
MICROECONOMICS (LOOSELEAF)-W/CONNECT
Ch. 1.2 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.2 - Prob. 3QQCh. 1.2 - Prob. 4QQCh. 1.A - Prob. 1ADQCh. 1.A - Prob. 2ADQCh. 1.A - Prob. 3ADQCh. 1.A - Prob. 1ARQCh. 1.A - Prob. 2ARQCh. 1.A - Prob. 1AP
Ch. 1.A - Prob. 2APCh. 1.A - Prob. 3APCh. 1.A - Prob. 4APCh. 1.A - Prob. 5APCh. 1.A - Prob. 6APCh. 1.A - Prob. 7APCh. 1.A - Prob. 8APCh. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8P
Knowledge Booster
Similar questions
- In a month, Carlos can produce a maximum of either 50 bushels of pears or 25 bushels of apples, or any linear combination in between.Similarly, Debora can produce a maximum of either 40 bushels of pears or 10 bushels of apples, or any linear combination in between. What is the opportunity cost for Carlos to produce one more bushel of apples in terms of pears? One bushel of apples equals bushels of pears.What is the opportunity cost for Debora to produce one more bushel of apples in terms of pears? One bushel of apples equals bushels of pears. What would Debora and Carlos agree to as acceptable terms of trade? bushels of pears per bushel of apples.arrow_forwardSuppose that in the country of England, two goods can be produced on available agricultural land: wine and wool. Suppose that the opportunity costs of production are constant, so that the PPF is a straight line. Further, when all resources are devoted to wine production, England can produce 200 (thousand) barrels. When all resources are devoted to wool production, England can produce 400 (thousand) bushels of wool. What are the opportunity costs in England of producing a barrel of wine? Type your numeric answer and submitarrow_forwardSuppose that, on the basis of a nation’s production possibilities curve, an economy must sacrififice 10,000 pizzas domestically to get the 1 additional industrial robot it desires but that it can get the robot from another country in exchange for 9000 pizzas. Relate this information to the following statement: “Through international specialization and trade, a nation can reduce its opportunity cost of obtaining goods and thus ‘move outside its production possibilities curve.’”arrow_forward
- Given that Sandy can produce 10 economics reports or make 2 sales calls and Tim can produce 2 economics reports or make 1 sales call, we can conclude that, Group of answer choices 1. Sandy should specialize in economics reports, and Tim should specialize in sales calls. 2. Sandy should produce both economics reports and sales calls since she cannot possibly gain from trade with Tim. 3. Tim should produce both economics reports and sales calls. 4. Tim should specialize in producing economics reports, and Sandy should specialize in producing sales calls.arrow_forwardAFTER THE CHART Suppose Frances is currently using combination D, producing one truck per day. Her opportunity cost of producing a second truck per day is per day. Now, suppose Frances is currently using combination C, producing two trucks per day. Her opportunity cost of producing a third truck per day is per day. From the previous analysis, you can determine that as Frances increases her production of trucks, her opportunity cost of producing one more truck . Suppose Frances buys a new tool that enables her to produce twice as many trucks per hour as before, but it doesn't affect her ability to produce puzzles. Use the green points (triangle symbol) to plot her new PPF on the previous graph. Because she can now make more trucks per hour, Frances's opportunity cost of producing puzzles is it was previously.arrow_forwardAs the manager at a local florist, you supervise two employees, Anita and Jerome. There are two tasks that need to be completed: floral arrangements and flower delivery. It takes Anita 30 minutes to finish one floral arrangement and it takes her 40 minutes to make one delivery. It takes Jerome 10 minutes to finish one floral arrangement and it takes him 30 minutes to make one delivery. a. Who has a comparative advantage in floral arrangements? What about deliveries? b. Suppose, initially, Jerome and Anita each spent 4 hours each day doing floral arrangements and 2 hours each day doing deliveries. If you changed their tasks so that each individual did nothing but the task for which they had a comparative advantage, how many more floral arrangements would your store make, and how many more deliveries?arrow_forward
- Q1. Assume that a country produces two goods, agriculture (which requires land and labor) and manufactured goods (which requires labor and capital), and is currently in autarky equilibrium. The country just finds that the international price ratio of agriculture relative to manufactured goods, i.e., PA/PM, in the world market is higher than the price ratio in its domestic market. Should this country trade? If so, which product should it export? Will it gain from trade? Illustrate your answer graphically using production-possibilities frontier (PPF) and indifference curves. In the same graph, identify the trade triangle, including export and import quantities. How will the size of the trade triangle, i.e., the levels of export and import quantities, in the above question change when PA falls in the world market? Illustrate your answer graphically. How will the nominal wage rate in this country be affected by trade? What about real wages? Illustrate your answer graphically. Your…arrow_forwardYou have decided to specialize in gathering firewood while Friday has specialized in fishing. Your time allocation sliders are set to allocate all of your time to gathering firewood. Now, use the additional sliders to state how many logs you will trade to Friday and how many fish you want in return. You must select a trade that make both you and Friday better off than you were before specialization and trading. In other words, you must both receive more than 2000 calories of fish and 32 logs of firewood. Both you and Friday’s consumption point is displayed on the PPF graphs as you adjust the trade.arrow_forwardQ32 Consider the Production Possibility Frontiers of two countries, Australia and Brazil. Assume both have linear PPFs and the two countries both produce the same two goods: fruits and grain. Given its resources, Australia can produce either 2 units of grain per day or 1 unit of fruits; Brazil can produce either 5 units of grain or 4 units of fruits. (You may, for your own use, find it helpful to draw the Production Possibilities Frontiers for each country, though these won't be included in the answers you provide in you online responses.) a. If there were no trade, what would be the local price of fruits in each country, measured in units of grain? b. If trade is allowed, which country will export fruits and which country will export grain (if any)? c. What are the gains from trading a unit of fruit if the international price of fruit is equal to the average of the local prices in the two countries? d. How are the gains from trade distributed? Comment on why the benefits…arrow_forward
- part C and D needed only Consider the Production Possibility Frontiers of two countries, Australia and Brazil. Assume both have linear PPFs and the two countries both produce the same two goods: fruits and grain. Given its resources, Australia can produce either 2 units of grain per day or 1 unit of fruits; Brazil can produce either 5 units of grain or 4 units of fruits. (You may, for your own use, find it helpful to draw the Production Possibilities Frontiers for each country, though these won't be included in the answers you provide in you online responses.) a. If there were no trade, what would be the local price of fruits in each country, measured in units of grain? b. If trade is allowed, which country will export fruits and which country will export grain (if any)? c. What are the gains from trading a unit of fruit if the international price of fruit is equal to the average of the local prices in the two countries? d. How are the gains from trade distributed? Comment…arrow_forwardAnswer the question on the basis of the following production possibilities data for Gamma and Sigma. All data are in tons. Gamma production possibilities: A B C D E Tea 120 90 60 30 0 Pots 0 30 60 90 120 Sigma production possibilities: A B C D E Tea 40 30 20 10 0 Pots 0 30 60 90 120 What are the limits of the terms of trade between Gamma and Sigma? 1 tea=2 pots to 1 tea=6 pots 1 tea=3 pots to 1 tea=6 pots 1 tea=2 pots to 1 tea=3.5 pots 1 tea=1 pot to 1 tea=3 potsarrow_forwardSuppose that there are three beachfront parcels of land available for sale in Astoria, and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the selling price of each is $745,000. The following table states each person's willingness and ability to purchase a parcel. Willingness and Ability to Purchase (Dollars) Alyssa 720,000 Brian 690,000 Crystal 680,000 Nick 900,000 Rosa 810,000 Tim 770,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. Alyssa Brian Crystal Nick Rosa Tim Assume that the three beachfront parcels are sold to the people you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a price of $732,500. This fourth parcel _____________be sold…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning