Consider the following scenario: Country A Country B Soybeans 3 12 Textiles 6 8 Suppose that...
Consider the following scenario:
|
Country A |
Country B |
|
|
Soybeans |
3 |
12 |
|
Textiles |
6 |
8 |
Suppose that wa=$1000 and e=1 (e is the exchange rate). What is the maximum level of wb (expressed in $) such that these 2 countries trade according to Comparative Advantage?
A) $4000 B) $250 C) 750 D) 1333.30
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Consider the following
scenario:
Country
A
Country
B
Soybeans
3
12
Textiles
6
8
Suppose that...
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Comparative advantage
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ANSWER A, B, C, D & E.
(a) In which product does country H have the
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to Smith’s theory, which product should country H export? In
which product does
country H have the comparative advantage over country F?
According to Ricardo’s theory,
which product should country H export?
(b) Specify the production possibility curve
(PPC) in country H. Calculate the production
and consumption allocation of country H in the no-trade case.
Take fruits as...
(a) In which product does country H have the absolute advantage over country F? According to...
(a) In which product does country H have the absolute advantage
over country F? According
to Smith’s theory, which product should country H export? In
which product does
country H have the comparative advantage over country F?
According to Ricardo’s theory,
which product should country H export?
(b) Specify the production possibility curve (PPC) in country H.
Calculate the production
and consumption allocation of country H in the no-trade case.
Take fruits as the unit of account.
How much is...
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ignore the writing. Suppose France can produce four phones or three computers with one unit of...
ignore the writing.
Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. Each country has 600 units of labor. a) Draw a table for both countries with 4 columns labeled Max Phones, Max Computers, Cost Phone, Cost Computer b) Draw the PPF for Both Countries (two separate graphs) c) Find the absolute advantage for each country d) Find the comparative advantage...
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Question 4: Consider two countries A & B with the following PPF's for production of cookies (C) and milk (M): Country A: C-100-5M Country B: C-20-0.5M Part A: In two separate graphs with C on the Y-axis and M on the X-axis, graph both PPFs. Part B: Determine which country has an absolute advantage in milk production. Part C: Determine which country has a comparative advantage in milk production. Part D: If the countries decide to trade, which good will...
Comparative advantage
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ANSWER A, B, C, D & E.
(a) In which product does country H have the
absolute advantage over country F? According
to Smith’s theory, which product should country H export? In
which product does
country H have the comparative advantage over country F?
According to Ricardo’s theory,
which product should country H export?
(b) Specify the production possibility curve
(PPC) in country H. Calculate the production
and consumption allocation of country H in the no-trade case.
Take fruits as...
(a) In which product does country H have the absolute advantage
over country F? According
to Smith’s theory, which product should country H export? In
which product does
country H have the comparative advantage over country F?
According to Ricardo’s theory,
which product should country H export?
(b) Specify the production possibility curve (PPC) in country H.
Calculate the production
and consumption allocation of country H in the no-trade case.
Take fruits as the unit of account.
How much is...
ELUZU Homework ( C 3 ) When a country has a comparative advantage in the production of a good, it means that can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods The following graphs show the production possibilities frontiers (PPP) for Freedonia and Desonia. Both countries produce potatoes and coffee, each Initially (Le., before specialization and trade) producing 12...
ignore the writing.
Suppose France can produce four phones or three computers with one unit of labor, and Sweden can produce one phone or two computers with one unit of labor. Each country has 600 units of labor. a) Draw a table for both countries with 4 columns labeled Max Phones, Max Computers, Cost Phone, Cost Computer b) Draw the PPF for Both Countries (two separate graphs) c) Find the absolute advantage for each country d) Find the comparative advantage...
4. Specialization and trade When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods The following graphs show the production possibilities frontiers (PPFS) for Freedonia and Desonia. Both countries produce lemons and sugar, each initially (.e., before specialization and trade) producing 6 million...
Consider a 2-good 2-country Ricardian model of trade where
labour productivity differences are due to different levels of
“institutions”. The 2 goods are airplanes and frozen chicken and
the 2 countries Japan and Mozambique. The unit labour requirements
are given in the table below.
2. Institutions as a source of comparative advantage Consider a 2-good 2-country Ricardian model of trade where labour productivity differences are due to different levels of "institutions". The 2 goods are airplanes and frozen chicken and...
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