PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 3P
To determine
The
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The two countries decide to trade with each other, which allows them to be able to specialize in the good in which they have a comparative advantage. , Derryland should specialize in the production of
Group of answer choices
cheese and Whetonia should specialize in the production of bread.
bread and Whetonia should specialize in the production of cheese.
both goods and Whetonia should specialize in the production of neither good.
neither good and Whetonia should specialize in the production of both goods.
Suppose that Canada can produce 100,000 hockey sticks or 10,000 gallons of maple syrup in a typical workweek, while Germany can produce 90,000 hockey sticks or 10,000 gallons of maple syrup in a typical workweek. From these numbers, we can conclude:
Question 48 options:
Canada has a comparative advantage in the production of hockey sticks.
Germany has a comparative advantage in the production of hockey sticks.
Canada has an absolute advantage in the production of maple syrup.
Germany has an absolute advantage in the production of maple syrup.
Comparative advantage does not address
Question 10 options:
whether specialization and trade benefit more than one party to a trade.
whether absolute advantage or comparative advantage that really matters.
how are the gains from trade shared among the parties to a trade.
whether it possible for specialization and trade to increase total output of traded goods.
Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Ecuador’s biggest export is crude petroleum (unprocessed), 63% of which it exports to the United States, and Ecuador’s biggest import is refined petroleum (processed), of which it imports 70% from the United States. Based on this information, which of the following statements is true? Group of answer choices Ecuador has comparative advantage in extracting crude petroleum; the US has comparative advantage in producing refined petroleum. Not enough information. The US has comparative advantage in extracting crude petroleum; Ecuador has comparative advantage in producing refined petroleum. Ecuador has absolute advantage in extracting crude petroleum and the US has absolute advantage in producing refined petroleum.arrow_forwardQ58 Suppose Spain is currently producing 90 units of wine and 10 units of cheese, but to produce 10 more units of cheese it must sacrifice 30 units of wine. Further, suppose that Portugal produces 45 units of wine and 45 units of cheese, but to produce 10 more units of cheese it must sacrifice only 10 units of wine. It can be concluded that... a. More information is needed to conclude anything about comparative advantage in either country. b. Portugal has an absolute advantage in wine production and Spain has an absolute advantage in cheese production. c. Spain has a comparative advantage in the production of wine and Portugal has a comparative advantage in the production of cheese. d. Spain has an absolute advantage in both wine and cheese production. e. Portugal has an absolute advantage in both wine and cheese production.arrow_forwardAccording to the principle of comparative advantage, - countries should specialize in the production of goods for which they use more resources than their trading partners - countries with a comparative advantage in the production of every good need not specialize - countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners - countries should specialize in the production of goods for which they use fewer resources than their trading partnersarrow_forward
- Suppose 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_forwardQ25. In the solution of the game, does Victor ask Hermione to go to the Yule ball? Yes No Q26. In the solution of the game, does Hermione say yes to Victor? Yes No Q27. In the solution of the game, does Ron ask Hermione to go to the Yule ball? Always Yes, unless Victor asked first Yes, unless Hermione said yes to Victor Never Q28. In the solution of the game, does Hermione say yes to Ron? Yes, always Only if Victor didn't ask first Only after Victor asks first Neverarrow_forwardSuppose the United States is currently producing 140 tons of hamburgers and 63 tons of tacos and Mexico is currently producing 14 tons of hamburgers and 35 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of _____ additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer) and a total of ____ additional ton(s) of tacos can be produced.arrow_forward
- According to comparative advantage, trade between two countries Group of answer choices will benefit all the industries in each of the countries. guarantees that consumption levels will be equal in the two countries. maximizes the amount of inputs that are used in the production of all products. allows each of the trading countries to allocate its resources most efficiently.arrow_forwardIn the Davis household, husband Peter can cook 1 dinner in 60 minutes, and do 1 load of laundry in 30 minutes. Wife Angelica can cook 1 dinner in 30 minutes, and do 1 load of laundry in 20 minutes. Peter has an absolute advantage in cooking, and Angela has an absolute advantage in doing laundry. Angela has an absolute in cooking, and Peter has an absolute advantage in doing laundry Peter has an absolute advantage in cooking, and an absolute advantage in doing laundry. Angela has an absolute advantage in cooking, and an absolute advantage in doing laundry.arrow_forwardQ1. 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_forward
- You 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_forwardEngland and Scotland both produce scones and sweaters. Suppose that an English worker can produce 40 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 20 scones per hour or 2 sweaters per hour. workers have an absolute advantage in producing scones, and workers have an absolute advantage in producing sweaters. workers have a comparative advantage in producing scones, and workers have a comparative advantage in producing sweaters. If England and Scotland decide to trade, Scotland will trade to England. If an English worker could produce only 20 scones per hour, England gain from trade, and Scotland gain from trade.arrow_forwardABSOLUTE ADVANTAGE & COMPARATIVE ADVANTAGE Q.6. An average worker in brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, whilst an average worker in Peru can produce an ounce of soybeans in 50 minutes and an ounce of coffee in 75 minutes. Who has the absolute advantage in coffee? Explain II. Who has the comparative advantage in coffee? Explain III. If the two countries specialize and trade with each other, who will import coffee? Explainarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education