Homework Answers
As the curve is convex or downward sloping that means as the firm increases the output of one good they have to give up more and more of the other good. That is increasing opportunity cost.
The answer is "C", it shows the autarky price of a country under increasing opportunity cost in produciton.
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Which of the following is true of the attached diagram? Good Y GIC PPF - Good...
1.The following statements about intra-industry trade are true, except one. Which one? a. It reflects the...
1.The following statements about intra-industry trade
are true, except one. Which one?
a. It reflects the trade in similar goods between countries.
b. It results from economies of scale.
c. It results from comparative advantage.
d. It does not affect income distribution as much as
inter-industry trade.
2.Consider the following diagram. P is the autarky
production point, and C is the free trade consumption point.
P1 represents autarky prices and P2
represents free-trade prices.
In this case, the autarky consumption...
Draw a PPF for The Federated States of Econesia (FSE) which can produce 1,000 diamonds if it devotes all resources to di...
Draw a PPF for The Federated States of Econesia (FSE) which can produce 1,000 diamonds if it devotes all resources to diamond production or 4,000 automobiles if it devotes all resources to automobile production. There is an increasing opportunity cost of producing each good. a) Draw a point “A” on your graph indicating the production of 500 diamonds and 2,000 automobilies. b) Draw a point “B” on the graph that would be an autarky equilibrium point. Be sure to add...
Which country exports good X, which country imports good X? Explain Mark is the relative price...
Which country exports good X, which country imports good X?
Explain
Mark is the relative price line for country A and country B in
the graph before trade.
At Autarky (pre-trade), which point represents production point
for country A? Which point represent consumption point for country
A?
At Autarky (pre-trade), which point represents production point
for country B? Which point represent consumption point for country
B?
With free trade, which point represents production point for
country A? Which point represent...
2 Autarky Equilibrium vs. Trade (80 points [10 per part]) Draw a PPF for The Federated...
2 Autarky Equilibrium vs. Trade (80 points [10 per part]) Draw a PPF for The Federated States of Econesia (FSE) which can produce 1,000 diamonds if it devotes all resources to diamond production or 4,000 automobiles if it devotes all resources to automobile production. There is an increasing opportunity cost of producing each good a) Draw a point "A" on your graph indicating the production of 500 diamonds and 2,000 automobilies. b) Draw a point "B" on the graph that...
Suppose a small country producing cars (C) and food (F) is closed to free trade. Its...
Suppose a small country producing cars (C) and food (F) is closed to free trade. Its production possibilities frontier (PPF) reflects increasing costs (it’s bowed out). Finally, preferences in this country are such that consumers like both goods equally: U(DC , DF ) = D 1 2 CD 1 2 F . (a) Using graphs, show the autarky equilibrium in this country. Show both (i) a graph of the PPF and indifference curve, and (ii) a graph of relative demand...
55 Community ne economy represented in the following Figure is presently producing 12 units of Good...
55 Community ne economy represented in the following Figure is presently producing 12 units of Good and perso mits of Good A: Production Policies Care2 GOODS 1. What is the opportunity cost of increasing production of Good from 2. What is the opportunity cost of increasing production of Good from 3. This is an example of constant increasing decreasing/ portr 4. This is an example of constant/ncreasing decreasing report 2 55 Community ne economy represented in the following Figure is...
Chapter 2 Homework 1. Points that lie outside (or beyond) the PPF are attainable. ainable. efficient....
Chapter 2 Homework 1. Points that lie outside (or beyond) the PPF are attainable. ainable. efficient. D. ineflficient 2. Which of the following statements is true? less of some other good. to produce goods. another possibilities frontier (PPF). A. In a world of efficiently used scarce B. The law of increasing opportunity costs assumes that all people have the same ability C. Efficiency implies that it is impossible to get more of one good without getting less of D. Even...
Suppose there are two nations (A and B) which have the same technology, identical tastes but...
Suppose there are two nations (A and B) which have the same technology, identical tastes but differing factor endowments, two commodities (X and Y) produced under increasing costs conditions, and no barriers to trade. Nation A is labour-abundant and Nation B is capital abundant. X is the labour-inten?ive good and Y is the capital-intensive good. Prove geometrically that mutually advantageous trade between the two nations is possible. Your answer should show the autarky and free-trade points of production and consumption...
16 Which of the following would shift the U.S. PPF outward, ceteris paribus? An increase in...
16 Which of the following would shift the U.S. PPF outward, ceteris paribus? An increase in capital. An income tax cut for consumers. A decrease in education (human capital). All of the above would cause outward shifts of the U.S. PPF. The development and use of a new production technology in Canada. 19 According to the Law of Comparative Advantage, if two countries specialize in the production of the good in which they have a comparative advantage, then all goods...
The following table summarizes the combinations of goods X and Y that two individuals, Tina and...
The following table summarizes the combinations of goods X and Y that two individuals, Tina and David, can each produce individually. Tina X Y 1000 50 5 0 10 David XY 1500 75 37.5 0 75 fesch person specializes in the production of the good for which they have the comparative advantage, then would specialize in the production of good Y, and would specialize in the production of good X. (Hint: Calculate the opportunity cost of producing X and Y...
1.The following statements about intra-industry trade
are true, except one. Which one?
a. It reflects the trade in similar goods between countries.
b. It results from economies of scale.
c. It results from comparative advantage.
d. It does not affect income distribution as much as
inter-industry trade.
2.Consider the following diagram. P is the autarky
production point, and C is the free trade consumption point.
P1 represents autarky prices and P2
represents free-trade prices.
In this case, the autarky consumption...
Which country exports good X, which country imports good X?
Explain
Mark is the relative price line for country A and country B in
the graph before trade.
At Autarky (pre-trade), which point represents production point
for country A? Which point represent consumption point for country
A?
At Autarky (pre-trade), which point represents production point
for country B? Which point represent consumption point for country
B?
With free trade, which point represents production point for
country A? Which point represent...
2 Autarky Equilibrium vs. Trade (80 points [10 per part]) Draw a PPF for The Federated States of Econesia (FSE) which can produce 1,000 diamonds if it devotes all resources to diamond production or 4,000 automobiles if it devotes all resources to automobile production. There is an increasing opportunity cost of producing each good a) Draw a point "A" on your graph indicating the production of 500 diamonds and 2,000 automobilies. b) Draw a point "B" on the graph that...
55 Community ne economy represented in the following Figure is presently producing 12 units of Good and perso mits of Good A: Production Policies Care2 GOODS 1. What is the opportunity cost of increasing production of Good from 2. What is the opportunity cost of increasing production of Good from 3. This is an example of constant increasing decreasing/ portr 4. This is an example of constant/ncreasing decreasing report 2 55 Community ne economy represented in the following Figure is...
Chapter 2 Homework 1. Points that lie outside (or beyond) the PPF are attainable. ainable. efficient. D. ineflficient 2. Which of the following statements is true? less of some other good. to produce goods. another possibilities frontier (PPF). A. In a world of efficiently used scarce B. The law of increasing opportunity costs assumes that all people have the same ability C. Efficiency implies that it is impossible to get more of one good without getting less of D. Even...
Suppose there are two nations (A and B) which have the same technology, identical tastes but differing factor endowments, two commodities (X and Y) produced under increasing costs conditions, and no barriers to trade. Nation A is labour-abundant and Nation B is capital abundant. X is the labour-inten?ive good and Y is the capital-intensive good. Prove geometrically that mutually advantageous trade between the two nations is possible. Your answer should show the autarky and free-trade points of production and consumption...
The following table summarizes the combinations of goods X and Y that two individuals, Tina and David, can each produce individually. Tina X Y 1000 50 5 0 10 David XY 1500 75 37.5 0 75 fesch person specializes in the production of the good for which they have the comparative advantage, then would specialize in the production of good Y, and would specialize in the production of good X. (Hint: Calculate the opportunity cost of producing X and Y...
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