Economics
Suppose that Costa Rican worker Carlos can produce either 100 pounds of coffee or 1 computer per week, and a second worker, Maria, can produce either 150 pounds of coffee or 1 computer per week. Both Carlos and Maria work 50 weeks per year. A third worker, Pedro, joins the Costa Rican economy. Pedro can produce either 140 pounds of coffee or 1 computer per week. Like the other two workers, Pedro works 50 weeks per year.
b. Assume that world prices are such that 1 computer trades for 125 pounds of coffee on international markets and that Costa Rica is open to trade.
If coffee can either be produced domestically or imported from abroad in exchange for Costa Rican computers, then the maximum amount of coffee that Carlos, Maria and Pedro can consume is pounds. To obtain this amount of coffee, Carlos will produce , Maria will produce , and Pedro will produce .
If computers can either be produced domestically or imported from abroad in exchange for Costa Rican coffee, then the maximum number computers that the three workers can consume is . To obtain this number of computers, Carlos will produce , Maria will produce , and Pedro will produce .
c. Assume instead that world prices are such that 1 computer trades for 200 pounds of coffee on international markets and Costa Rica is open to trade.
If coffee can either be produced domestically or imported from abroad in exchange for Costa Rican computers, then the maximum amount of coffee that Carlos and Maria can consume is pounds. To obtain this amount of coffee, Carlos will produce , Maria will produce , and Pedro will produce .
If computers can either be produced domestically or imported from abroad in exchange for Costa Rican coffee, then the maximum number computers that the three workers can consume is . To obtain this number of computers, Carlos will produce , Maria will produce , and Pedro will produce .
Homework Answers
Part (c) 2nd question
Since both Carlos and Maria have a comparative advantage in producing coffee with respect to the world prices of computer, they will both produce coffee.
Coffee production (pounds per year)
Carlos: 100*50 = 5000
Maria: 150*50 = 7500
Total coffee production = 12500 pounds
World prices of computers per pound of coffee = 1/80
Maximum number of computers that can be consumed = 12,500 * 1/80 = 156.25
For graph, the 3 points that need to be plotted are:
| X coordinate | Y coordinate |
| Computers per year | Coffee (pound per year) |
| 100 | 0 |
| 0 | 12500 |
| 50 | 7500 |
Economics
Suppose that Costa Rican worker Carlos can produce either 150 pounds of coffee or 1 computer per week, and a second worker, Maria, can produce either 50 pounds of coffee or 1 computer per week. Both Carlos and Maria work 50 weeks per year. A third worker, Pedro, joins the Costa Rican economy. Pedro can produce either 100 pounds of coffee or 1 computer per week. Like the other two workers, Pedro works 50 weeks per year.If all three workers completely specialize in the production of one good,...
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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...
Yolo and Solano are two countries that both produce shrimp and tomatoes. In Yolo each worker in a one-hour period can produce either 29.49 pounds of shrimp or 12.67 pounds of vegetables. In Solano each worker in a one-hour period can produce either 26.42 pounds of shrimp or 7.19 pounds of tomatoes. Suppose both countries have constant opportunity cost of production and decide to specialize and exchange. The country that specializes in tomatoes is willing to sell 100 pounds of...
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Please help me. I have tried these 3 on my own, but I am still
not understanding
1) Two countries produce two goods and they each have 4 million
hours of labor. Consider the table that shows the quantity produced
per labor hour:
shirts
corn
Alpha
4
12
Beta
2
10
If each country allocates 2 million hours of labor to each good
then in total the two countries can together produce __ million
shirts and ___ million brushels of...
4. Specialization and tradeWhen a country specializes in the production of a good, this
means that it can produce this good at a lower opportunity cost
than its trading partner. Because of this comparative advantage,
both countries benefit when they specialize and trade with each
other.The following graphs show the production possibilities frontiers
(PPFs) for Maldonia and Lamponia. Both countries produce potatoes
and coffee, each initially (i.e., before specialization and trade)
producing 18 million pounds of potatoes and 9 million...
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