MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
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Question
Chapter 20, Problem 8RQ
To determine
The benefits of an international trade.
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Students have asked these similar questions
5. Suppose that the comparative-cost ratios of two products-
baby formula and tuna fish-are as follows in the hypotheti-
cal nations of Canswicki and Tunata:
Canswicki: 1 can baby formula = 2 cans tuna fish
1 can baby formula = 4 cans tuna fish
Tunata:
In what product should each nation specialize? Explain why
terms of trade of 1 can baby formula =
would be acceptable to both nations.
25 cans tuna fish
Suppose that two countries can produce wheat or cotton. If country A produces only wheat it can produce 38 units of wheat, and if it only produces cotton
it can produce 45 units of cotton. If country B produces only wheat it can produce 27 units of wheat, and if it only produces cotton it can produce 35 units
of cotton. Given the production possibilities frontiers above which of the following would be feasible terms of trade between country A and country B?
O a. One unit of cotton for 0.92 units of wheat.
O b. One unit of cotton for 0.72 units of wheat.
O c. One unit of wheat for 1.08 units of cotton.
O d. One unit of wheat for 1.35 units of cotton.
O e. None of the other answers are feasible terms of trade.
Which of the following statements about foreign trade is
correct? Choose an answer:
O 1. A good is imported if the world market price for this good is higher than the domestic
opportunity costs of producing this good.
O 2. A good is exported if the world market price for this good is lower than the domestic
opportunity costs of producing this good.
3. The levying of a domestic duty rate on an imported good increases the
producer surplus and reduces the domestic consumer surplus.
O 4. If a country has an absolute advantage in one good, it also has a comparative advantage
in that good.
O 5. A particularly productive country can have a comparative advantage in all goods.
Chapter 20 Solutions
MACROECONOMICS W/CONNECT
Ch. 20.2 - Prob. 1QQCh. 20.2 - Prob. 2QQCh. 20.2 - Prob. 3QQCh. 20.2 - Prob. 4QQCh. 20 - Prob. 1DQCh. 20 - Prob. 2DQCh. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Prob. 6DQ
Ch. 20 - Prob. 7DQCh. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQCh. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Prob. 3RQCh. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQCh. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 1PCh. 20 - Prob. 2PCh. 20 - Prob. 3PCh. 20 - Prob. 4P
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