MICROECONOMICS >C<
20th Edition
ISBN: 9781308397153
Author: McConnell
Publisher: MCG/CREATE
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Question
Chapter 25, Problem 9DQ
To determine
The reason for the increased exports to US by other countries.
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Chapter 25 Solutions
MICROECONOMICS >C<
Ch. 25.1 - Prob. 1QQCh. 25.1 - Prob. 2QQCh. 25.1 - Prob. 3QQCh. 25.1 - Prob. 4QQCh. 25 - Prob. 1DQCh. 25 - Prob. 2DQCh. 25 - Prob. 3DQCh. 25 - Prob. 4DQCh. 25 - Prob. 5DQCh. 25 - Prob. 6DQ
Ch. 25 - Prob. 7DQCh. 25 - Prob. 8DQCh. 25 - Prob. 9DQCh. 25 - Prob. 10DQCh. 25 - Prob. 11DQCh. 25 - Prob. 1RQCh. 25 - Prob. 2RQCh. 25 - Prob. 3RQCh. 25 - Prob. 4RQCh. 25 - Prob. 5RQCh. 25 - Prob. 6RQCh. 25 - Prob. 7RQCh. 25 - Prob. 8RQCh. 25 - Prob. 9RQCh. 25 - Prob. 10RQCh. 25 - Prob. 1PCh. 25 - Prob. 2PCh. 25 - Prob. 3PCh. 25 - Prob. 4PCh. 25 - Prob. 5P
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- 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?arrow_forwardP1. 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,…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_forward
- 6-Look at a country’s Terms of Trade (T.O.T.). It is assumed that when the T.O.T. value increases the country’s wellbeing goes up, and when the T.O.T. value declines, the country’s wellbeing is reduced. Do you agree??? Explain!!! Among others you stated: “Trade between countries highly depends upon terms of trade. T.O.T. has important effects on the balance of payments or on its economic growth so the T.O.T. is used to measure the wellbeing of the country.” Further down though…you refute your previous statement by saying: “But T.O.T. should not be used to calculate wellbeing as its calculation does not show the volume of export of the country, only shows relative changes between countries….”etc.arrow_forwardAssume that the comparative-cost ratios of two products— baby formula and tuna fish—are as follows in the nations of Canswicki and Tunata: Canswicki: 1 can baby formula ≡ 2 cans tuna fish Tunata: 1 can baby formula ≡ 4 cans tuna fishIn what product should each nation specialize? Which of the following terms of trade would be acceptable to both nations: (a) 1 can baby formula ≡ 2 1 2 cans tuna fish; (b) 1 can baby formula ≡ 1 can tuna fish; (c) 1 can baby formula ≡ 5 cans tuna fish?arrow_forwardAccording to the open-economy macroeconomic model, import quotas increase which of the following O a. net exports and net capital outflow O b. net exports but not net capital outflow. O c. net capital outflow but not net exports. O d. neither net exports nor net capital outflow.arrow_forward
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