EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 19, Problem 1SP
(a):
To determine
(b):
To determine
Opportunity cost of producing meatballs in P and that of harvesting clams in P.
(c):
To determine
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Suppose in one hour, 10 kilograms of rice or 5 meters of cloth is produced in India; while 5 kilograms of rice or 2 meters of cloth is produced in Thailand. What is the opportunity cost of cloth in Thailand?
Refer to Table 19.1. In Mexico, the opportunity cost of 1 bushel of bananas is
Group of answer choices
1 bushels of oranges.
5 bushels of oranges.
2 bushel of oranges.
1/2 bushel of oranges.
Suppose that Italy and Spain both produce cheese and wine. Italy's opportunity cost of producing a bottle of wine is 3 pounds of cheese. That is, Italy forgoes the production of 3 pounds of cheese when it produces a bottle of wine. Spain's opportunity cost of producing a bottle of wine is 4 pounds of cheese.
_________ (options: Neither Italy nor Spain has, Italy has, Both Italy and Spain have, Spain has) a comparative advantage in the production of wine.
_________ (options: Neither Italy nor Spain has, Italy has, Both Italy and Spain have, Spain has) a comparative advantage in the production of cheese.
Chapter 19 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Comparing your answers in the previous questions suggests that the opportunity cost of producing 50 million additional garments of clothing at point B is______ (choose between these: less than, greater than or equal to). and the opportunity cost of producing 50 million additional garments of clothing at point A. This reflects the________ (choose between: notion that countries can gain from trade, fact that resources are scarce or law of increasing opportunity costs)arrow_forwardConsider two countries: Alland and Georgeland. Say that Alland can produce 48 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 68 units of food per person per year or 17 units of clothing per person per year. Compute each country's opportunity cost for each product. Tip: The list below contains the correct answers. Enter the correct amount for each of the 4 boxes making sure it is entered exactly as written below. Don’t omit or add space, digits or other characters. 0.25, 0.33, 1.33, 1.25, 1.40, 3, 4, 30, 40 Alland’s opportunity cost of 1 unit of food is [a] unit(s) of clothing Alland’s opportunity cost of 1 unit of clothing is [b] unit(s) of food Georgeland’s opportunity cost of 1 unit of food is [c] unit(s) of clothing Georgeland’s opportunity cost of 1 unit of clothing is [d] unit(s) of food Enter Alland or Georgeland in the appropriate box. Please make sure to enter each name exactly as written here. Don’t omit or add…arrow_forwardRefer to Table 19.1. In Guatemala, the opportunity cost of 1 bushel of oranges is Group of answer choices 2 bushel of bananas. 4 bushels of bananas. 1/2 bushel of bananas. 1 bushels of bananas.arrow_forward
- Suppose two nations, Beta and Gamma, each make aircraft and corn. The main resource in each nation is hours of "labor". Production occurs in each nation according to the following table. With one hour, a worker in each nation can produce the following: Table showing Aircraft and Corn produced per hour Aircraft Corn Beta 1 per hour 500 per hour Gamma 2 per hour 300 per hour What is the opportunity cost of each good (in terms of the other good) for each nation? Try creating a small table of the opportunity costs such as this: Beta: 1 aircraft = _______ corn 1 corn = _______ aircraft Gamma: 1 aircraft = _______ corn 1 corn = _______ aircraft Which nation has the Absolute Advantage in aircraft? Which nation has the Absolute Advantage in corn? Which nation has the Comparative Advantage in aircraft? Which nation has the Comparative Advantage in corn? If these two nations trade, what good should each specialize in and export to the other? What…arrow_forwardAdam Smith favors a policy of laissez-faire in managing economic activities. Why? Economics deals with the efficient use of resources. Why? Marginal analysis produces more optimal outcomes when working with scarce resources. How? It is possible for everyone to enjoy a comparative advantage in a task of their choosing. Why? Larger marketplaces tend to generate more wealth than smaller marketplaces. Why? Calculate the opportunity cost of producing the first 10 and the last 10 missiles. Discuss if the frontier exhibits increasing opportunity costs Missiles vs. Milk (millions of gallons) 0 40 10 30 20 20 30 10 40 0 -Using the supply and demand model, discuss what would happen to the market price if… Incomes increase Technology improves -When ASU increased its tuition from $200 per credit to $250 per credit the enrollment declined from 50,000 to 40,000. Explain…arrow_forwardThe opportunity cost of 1 unit of cheese for Derryland in terms of units of bread is The opportunity cost of 1 unit of cheese for Whetonia in terms of units of bread isarrow_forward
- According to the news wire what is the opportunity cost of a single missile test in terms of corn for each of north koreas 26 million peoplearrow_forward• Robinson Crusoe can gather 10 coconuts or catch 1 fish per hour. His friend Friday can gather 30 coconuts or catch 2 fish per hour. What is Crusoe's opportunity cost of catching one fish? What is Friday's? Who has an absolute advantage in catching fish? Who has a comparative advantage in catching fish?arrow_forwardCountry A has 6 million workers and Country B has 9 million workers. Each worker in Country A can produce 3 units of corn or 2 units of fabric in a year. Each worker in Country B can produce 1 unit of corn or 2 units of fabric in a year. a) What is country A’s opportunity cost of producing one unit of corn (in terms of units of fabric given up)? What is country B’s opportunity cost of producing one unit of fabric (in terms of units of corn given up)? b) Which country has a comparative advantage in producing corn? c) If the countries do not trade, then in each country, 1/3 of the population produces fabric and 2/3 produces corn. Consider a trade proposal: A trades 2 million units of corn for 1 million units of fabric from B. Assume the two countries first observe the proposal, then adjust the fractions of their population between the two productions, and finally trade according to the proposal. Compared to the case without trade, can the proposal increase each country’s fabric and…arrow_forward
- 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. Which country has the absolute advantage in the production of rubber? Which country has the absolute advantage in the production of radios? Explain your answers to (a) and (b). Calculate the opportunity cost of producing 80 additional radios in Japan. Calculate the opportunity cost of producing 80 additional radios in Malaysia. Which country has the comparative advantage in producing radios? Calculate the opportunity cost of producing 10 additional tons of rubber in Japan. Calculate the opportunity cost of producing 10 additional tons of rubber in Malaysia. Which country has the comparative advantage in producing rubber? In what product should Japan specialize? In what product should Malaysia specialize? If Malaysia wishes to trade 10 tons of rubber with Japan in exchange for radios, what is the lowest number of radios it should ask for in order to benefit…arrow_forwardSuppose Bulgaria produces only tablets and cars. The resources that are used in the production of these two goods are specialized—that is, some resources are more suitable for producing tablets than cars, whereas others are more suitable for producing cars than tablets. The shape of Bulgaria's production possibilities frontier (PPF) should reflect the fact that as Bulgaria produces more cars and fewer tablets, the opportunity cost of producing each additional car _______ ? Based on the previous description, the trade-off Bulgaria faces between producing cars and tablets is best represented by .arrow_forwardThere are two countries: Country A and Country B. These countries have the same amount of resources and both produce the same two goods, pencils and markers. The opportunity cost of pencils in Country A is ½ markers per pencil and the opportunity cost of pencils in Country B is 4 markers per pencil. Which country has a comparative advantage in each good? Group of answer choices Country A has a comparative advantage in both goods Country B has a comparative advantage in both goods Country A has a comparative advantage in markers; Country B has a comparative advantage in pencils Country A has a comparative advantage in pencils; Country B has a comparative advantage in markersarrow_forward
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