EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 39, Problem 9DQ
To determine
The reason for the increased exports to US by other countries.
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Poland requires 4 hours of labor to produce 1 ton of coal and 1 hour of labor to produce a bushel of
wheat. The Czech Republic requires 6 hours of labor to produce 1 ton of coal and 1 hour of labor to
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specializes according to its comparative advantage. How many units of which product will it produce?
250 tons of coal
1,000 bushels of wheat
O100 bushels of wheat
4,000 tons of coal
One of the main reasons for China to actively invest in foreign companies is to
enhance the competitiveness of Chinese firms globally.
take advantage of low wages in foreign countries.
Omake best use of its technological expertise in the world market.
meet the growing demand of the high population in China.
Two countries that specialize their production along the lines of comparative advantage and then trade with each other will be able to
sell and buy products at a higher international price
sell their products at a higher international price and buy products at a lower international price
O buy products at a higher international price and sell their products at a lower international price.
keep the domestic prices for domestic consumption and use international prices only for imports.
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25. If the free trade price is IP and this country imposes a trade tariff of $6, the loss to the economy as a result of this tariff is represented by
O(a) area (a) in this graph
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Chapter 39 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 39.1 - Prob. 1QQCh. 39.1 - Prob. 2QQCh. 39.1 - Prob. 3QQCh. 39.1 - Prob. 4QQCh. 39 - Prob. 1DQCh. 39 - Prob. 2DQCh. 39 - Prob. 3DQCh. 39 - Prob. 4DQCh. 39 - Prob. 5DQCh. 39 - Prob. 6DQ
Ch. 39 - Prob. 7DQCh. 39 - Prob. 8DQCh. 39 - Prob. 9DQCh. 39 - Prob. 10DQCh. 39 - Prob. 11DQCh. 39 - Prob. 1RQCh. 39 - Prob. 2RQCh. 39 - Prob. 3RQCh. 39 - Prob. 4RQCh. 39 - Prob. 5RQCh. 39 - Prob. 6RQCh. 39 - Prob. 7RQCh. 39 - Prob. 8RQCh. 39 - Prob. 9RQCh. 39 - Prob. 10RQCh. 39 - Prob. 1PCh. 39 - Prob. 2PCh. 39 - Prob. 3PCh. 39 - Prob. 4PCh. 39 - Prob. 5P
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- 3. The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade, the optimal product mix for China is alternative B and for the United States is alternative U. LO20.2 a. Are comparative-cost conditions such that the two countries should specialize? If so, what product should each produce? b. What is the total gain in apparel and chemical output that would result from such specialization? c. What are the limits of the terms of trade? Suppose that the actual terms of trade are 1 unit of apparel for 1 unit of chemicals and 4 units of apparel for 6 units of chemicals. What are the gains from specialization and trade for each nation? China Production Possibilities Product A D F Apparel (in thousands) 30 24 18 12 Chemicals (in tons) 12 18 24 30 U.S. Production Possibilities Product R T. V Apparel (in thousands) hemicals (in tons) 10 8. 4 4 8. 12 16 20 p. 579arrow_forwardAmerican apparel makers complain to Congress about competition from China. Congress decides to impose either a tariff or a quota on apparel imports from China. Which policy would Chinese apparel manufacturers prefer? LO26.4 a. Tariff. b. Quota.arrow_forward20. Assume that two countries (Home and Foreign) each produce two goods (wheat and rice) under constant cost production. Home produces 3 tons of rice or 1 ton of wheat with a day of labour. Foreign produces 2 tons of rice or 4 tons of wheat each day of labour. Without trade (in autarky), Home's daily production is 60 tons of rice and 20 tons of wheat. At which international price will Home's gains from trade be largest? A. 3 tons of rice per ton of wheat B. 2.5 tons of rice per ton of wheat C. 2 tons of rice per ton of wheat D. 1.5 ton of rice per ton of wheat E. 1 ton of rice per ton of wheatarrow_forward
- (Figure: Market for Engines) According to the figure, if there is international trade in this market, and the world price of an engine is $1,000: Price 2,000 Domestic supply 1,000 Domestic demand 500 1,000 Quantity of engines domestic producers will export 600 units. domestic consumers will export 1,000 units. domestic consumers will import 1,000 units. domestic producers will import 600 units. Incorrect OO 0 Oarrow_forwardWhen countries specialize in the production of goods they have the comparative advantage in, both and will increase O prices, the trade deficit O production, consumption price level, unemployment consumption, unemploymentarrow_forward5. 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 fisharrow_forward
- 1. Which of the following is true and which is false:a) The trade-to-GDP ratio for a nation that had €600 million in exports, €400 million in imports,and GDP of €2,000 million is equal to 0.5.b) The trade-to-GDP ratio for a nation that had €600 million in exports, €400 million in imports,and GDP of €2,000 million is equal to 0.05.c) A trade-to-GDP ratio in percentage terms equal to 120% means that the country exchanges1.2 times worth of goods and services of what it generates domestically over a certain period.d) The trade-to-GDP ratio is a measure of how income distribution between nations.e) The trade-to-GDP ratio is a measure of how intensively a country participates in internationaltrade.f) The higher the trade-to-GDP ratio, the stronger is the purchasing power of the country in theworld marketsarrow_forward(Table) The balance of trade is: Balance of Payments (Billions of U.S. Dollars) Component Exports Imports Income received Income payments Net transfers Amount $1,800 2,300 490 540 -100 Increase in foreign-owned assets in the United States 700 Increase in U.S.-owned assets abroad 100 O $500 billion. O-$650 billion. O-$500 billion. O $650 billion.arrow_forwardPrice (dollars per shirt) 44 40 36 32 28 24 20 16 12 O 8 O 32 million The figure shows the market for shirts in the United States, where D is the domestic demand curve and S is the domestic supply curve. The world price is $20 per shirt. The United States imposes a tariff on imported shirts, $4 per shirt. 24 million S In the figure above, with the tariff the United States imports 8 million D O 16 million 16 24 32 40 48 56 64 Quantity (millions of shirts per year) million shirts per year.arrow_forward
- “The U.S. and Mexico can gain from trade with one another by taking advantage of the low cost of producing microchips in the U.S and the low cost of producing brooms in Mexico. The cost of producing one broom in U.S is 9 microchips. In Mexico the cost of producing a broom is only 1/9 microchips. If the U.S. produces microchips and imports brooms, and if Mexico produces brooms and imports microchips, both countries will gain from trade because they‟ll each produce the good they can produce more cheaply and import the good that the other country produces more cheaply. Note that the U.S. has an absolute advantage in the production of microchips while Mexico has an absolute advantage in the production of brooms.” In context of International Business and Trade the above example of US and Mexico focuses on absolute advantage. Explain the theory of absolute advantage and comparative advantage and also how nation states are competing to gain advantage over each other.arrow_forwardCompany A can borrow yen at 15.5 percent and dollars at 14.5 percent. Company B can borrow yen at 16.3 percent and dollars at 14.767 percent. At what interest rates, do company A and B respectively have a comparative advantage? B has comparative advantage in both markets. OA: 15.5 percent, B: 14.767 percent A has a comparative advantage in both markets. A: 14.5 percent, B: 16.3 percentarrow_forward10.05 X Answered - Incorrect • 1 attempt left What is a tariff? A tax imposed on exported products that lowers the domestic price below the world price. А A tax imposed on exported products that fixes the domestic price equal to the world price. В A tax imposed on imported products that lowers the domestic price below the world price. Your answer A tax imposed on imported products that raises the domestic price above the world price.arrow_forward
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