Question

Question 1 [30 points]

Two Canadian workers, Paul and Irlene, can each produce computers or apples. Paul can produce either 60 pounds of apples or 1 computer per month. Irlene can produce either 140 pounds of apples or 1 computer per month.

Note: Please be sure to be as accurate as possible and to round your answers to two decimal places.

When plotting lines on the graph, select which line you want to plot from the drop down menu at the top of the graph.

a) Plot Canada's production possibilities curve by plotting at least 3 points on the curve.
Select which item you want to graph from the drop down menu at the top of the graph to manipulate that item.

v Canada's Production Possibilities Curve Canada's Production Possibilities Curve Consumption at World Price of 1 computer for 80 pounds of apples Consumption at World Price of 1 computer for 50 pounds of apples 2107 Apples (pounds) HHHHHHHHHHHHHHHHHHH 0.5 1 3 3.5 1.5 2 2.5 Computers Reset

b) How much of each good is produced if each worker specializes according to comparative advantage?

Computers =

Apples =

Answer c) - e) assuming that world prices are such that 1 computer trades for 80 pounds of apples on international markets.

c) If Canada is open to trade, show Canada's consumption possibilities on the graph above by plotting at least 2 points on the curve.
Select which item you want to graph from the drop down menu at the top of the graph to manipulate that item.

d) What is the most of each good that Canadians can consume when the economy is open?

Computers =

Apples =

e) How much more can Canadians consume when the economy is open as opposed to when it is closed?

Computers =

Apples =

Answer f) - h) assuming that world prices are such that 1 computer trades for 50 pounds of apples on international markets.

f) If Canada is open to trade, show Canada's consumption possibilities on the graph above by plotting at least 2 points on the curve.
Select which item you want to graph from the drop down menu at the top of the graph to manipulate that item.

g) What is the most of each good that Canadians can consume when the economy is open?

Computers =

Apples =

h) How much more can Canadians consume when the economy is open as opposed to when it is closed?

Computers =

Apples =

Answer 1

Paul Irlene → 60 pounds of Apple or I computer 140 pounds of Apple or I computer PPE (1,140) - CPF computer ( 1 1 24 produce according to CA 200 t then Paul produus I computer Trelene produces 140 Apple so total computers al Apples = 140 I computer can bade so Apples max computer Canada can consume = 2.5 max Apple = 200 canada gets a benefit of computer=0.5 Due to bade 7 2 6) 9) Apple = o C 26 I computer = so Apple max computer = 200 ма кера = 4 Gain from badi computer ao Apple - 2. )