Macroeconomics
13th Edition
ISBN: 9780134744452
Author: PARKIN, Michael
Publisher: Pearson,
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 5SPA
To determine
Identify the concept and calculate the values of the marginal benefit.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Suppose that Country A can produce 6060 bags of sugar or 3030 bags of flour per worker hour. Country B can produce 4040 bags of sugar or 1010 bags of flour per worker hour. Assume that there is 100%100% specialization, and each country has 55 worker hours.If each country specializes in its comparative advantage, calculate the quantity of the good that Country B should produce.
NEWS WIRE
NORTH KOREA'S ROCKETS DEEPEN FOOD CRISIS
North Korea's Rocket Launches Cost $1.3 Billion
North Korea's rocket program is costly. In December 2012 North Korea successfully launched a long-range rocket carrying a satellite into space. That feat cost $300 million. The entire cost of the rocket program last year - including the failed launch in April - totaled about $1.3 billion according to estimates by South Korea experts. With that much money North Korea could have purchased 4.6 million tons of corn - enough to feed its population for 4-5 years. North Korea's ambitious nuclear program costs nearly triple that amount. The burden of North Korea's military program is evident in widespread poverty and periodic starvation.
Source: News accounts of December 2012 - January 2013.
According to the News Wire, what is the opportunity cost of North Korea's rocket program in terms of corn for North Korea's 25 million people?
million tons of corn
Country A Country B
No. of pencils 100 50
produced
pounds of paper
produced 150 150
a)Country A and Country B can both produce paper and pencils, according to the table above and using the same amount of time and resources. Which country has the absolute advantage in producing each good?
choices
Country A has absolute advantage in pencils, but neither country has absolute advantage in paper
Country A has absolute advantage in both
Country B has absolute advantage in both
Country B has absolute advantage in paper, but Country A has absolute advantage in pencils
Neither country has absolute advantage in either good
Chapter 2 Solutions
Macroeconomics
Ch. 2.1 - Prob. 1RQCh. 2.1 - Prob. 2RQCh. 2.1 - Prob. 3RQCh. 2.1 - Prob. 4RQCh. 2.1 - Prob. 5RQCh. 2.1 - Prob. 6RQCh. 2.2 - Prob. 1RQCh. 2.2 - Prob. 2RQCh. 2.2 - Prob. 3RQCh. 2.2 - Prob. 4RQ
Ch. 2.2 - Prob. 5RQCh. 2.3 - Prob. 1RQCh. 2.3 - Prob. 2RQCh. 2.3 - Prob. 3RQCh. 2.3 - Prob. 4RQCh. 2.3 - Prob. 5RQCh. 2.3 - Prob. 6RQCh. 2.3 - Prob. 7RQCh. 2.4 - Prob. 1RQCh. 2.4 - Prob. 2RQCh. 2.4 - Prob. 3RQCh. 2.4 - Prob. 4RQCh. 2.4 - Prob. 5RQCh. 2.4 - Prob. 6RQCh. 2.4 - Prob. 7RQCh. 2.5 - Prob. 1RQCh. 2.5 - Prob. 2RQCh. 2.5 - Prob. 3RQCh. 2 - Prob. 1SPACh. 2 - Prob. 2SPACh. 2 - Prob. 3SPACh. 2 - Prob. 4SPACh. 2 - Prob. 5SPACh. 2 - Prob. 6SPACh. 2 - Prob. 7SPACh. 2 - Prob. 8SPACh. 2 - Prob. 9SPACh. 2 - Prob. 10SPACh. 2 - Prob. 11APACh. 2 - Prob. 12APACh. 2 - Prob. 13APACh. 2 - Prob. 14APACh. 2 - Prob. 15APACh. 2 - Prob. 16APACh. 2 - Prob. 17APACh. 2 - Prob. 18APACh. 2 - Prob. 19APACh. 2 - Prob. 20APACh. 2 - Prob. 21APACh. 2 - Prob. 22APACh. 2 - Prob. 23APACh. 2 - Prob. 24APACh. 2 - Prob. 25APA
Knowledge Booster
Similar questions
- 20)In economics, a person who can produce a good at a lower cost than another person is said to have ________________ in the production of that good. * a)a consumer surplus advantage. b)a comparative advantage. c)production possibilities. d)an absolute advantage.arrow_forwardSuppose that United States produces 10,000,000 barrels of oil and 1,000 bushels of wheat each week. Suppose that India produces 11235 barrels11235 barrels of oil and 11235 bushels11235 bushels of wheat each week. In autarky, what is the largest amount of wheat United States can consume every week? amount of wheat per week: ______________bushels What does the term autarky refer to? a situation where one country does not engage in trade with other countries government policies meant to reduce international trade the process of negotiating terms of trade between two countries a major argument against globalizationarrow_forwardAmanda can allocate her 8-hour day between baking and cooking. Each hour devoted to baking yields 2 cakes whereas each hour spent cooking produces 4 plates of food. Amanda’s neighbour, Patrice, can produce 3 cakes or 4 plates of food per hour. Who has the absolute advantage in the production of cakes? Who has the absolute advantage in the production of food? Who has a comparative advantage in the production of cakes? Who has a comparative advantage in the production of food? What is the opportunity cost for food?arrow_forward
- What is Production Efficiency and Inefficiency in economics? Explain with the help of a diagram. When does a country have a comparative advantage over producing a good? Explain with examples.arrow_forwardThe following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same quantity of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. Answer the questions below and show calculations where appropriate. Canada India Good A 600 500 Good B 950 1200 Draw a straight-line PPF graph for Canada. Draw a straight-line PPF graph for India. Which country has the comparative advantage in good A? In good B? Explain. What is India’s marginal opportunity cost of producing good A? Good B? Based on the data given, what is the terms of trade range for good A in terms of units of good B?arrow_forwardTina can allocate her 8-hour day between baking and cooking. Each hour devoted to baking yields 2 cakes whereas each hour spent cooking produces 4 plates of food. Tina's neighbor, Ingrid, can produce 3 cakes or 4 plates of food per hour. Who has the absolute advantage in the production of cakes? Who has absolute advantage in the production of food? Who has a comparative advantage in the production of cakes? Who has a comparative advantage in the production of food? What is the opportunity cost for food?arrow_forward
- Two countries produce two goods and they each have 3 million hours of labor. Consider the table that shows the quantity produced per labor hour: Shirts Corn (bushels) Alpha 4 12 Beta 2 10 If each country specializes in the good for which it has a comparative advantage then in total the two countries can together produce million shirts and million bushels of corn. Enter whole numbers.arrow_forward"Accoring to Ricardo's analysis, a country exports any good whose production requires fewer labor hours per unit than the labor hours per unit needed to produce the good in the foreign country. That is, the country exports any good in which its labor producivity is higher than the labor productivity for this good in the foreign country." Do you agree or disagree? why?arrow_forwardThe United States and Canada have the production possibilities curves shown above. It is determined that the United States has the comparative advantage in peanuts. Will both nations gain from trade if the terms of trade that are offered are 1 Peanut= 3 Corn? Why or why not? Show your work.arrow_forward
- I need help with questions 9 and 10. For question 9, since the x and y value are the same, I dont know how to identify in what type of production Pam has a comparative advantage in. For question 10, I do not understand how to calculate the combined output according to each person's specialization.arrow_forwardReview the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.arrow_forwardSuppose that Ontario and Vermont each produce two goods, maple syrup (M) and hockey sticks (H). The quantities of each good that can be produced by each region in a day are given below: ONTARIO VERMONT GALLONS OF MAPLE SYRUP/DAY 400 1200 HOCKEY STICKS/DAY 200 300 Which region has an absolute advantage in maple syrup production? Which region has an absolute advantage in hockey stick production? Find the opportunity costs of each good for both Ontario and Vermont. c. Should Ontario and Vermont specialize and trade? Which good should be produced by Ontario? Vermont? What are the terms of trade? Use PPCs and CPCs to show that each would be better off through specialization and trade. Of what principle does this question provide an example?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
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax