Question

In: Economics

Production Possibilities Table for Ireland Product A B C D Wine 120 90 60 0 Copper...

Production Possibilities Table for Ireland

Product A B C D

Wine 120 90 60 0

Copper 0 15 30 60

Production Possibilities Table for Peru

Product A B C D

Wine 500 350 150 0

Copper 0 30 70 100

Which country has an absolute advantage in Wine? In Copper?

What is the opportunity cost of producing 1 copper in Ireland?

What is it in Peru?

Which country has a comparative advantage in copper?

Which country has a comparative advantage in wine?

What are the terms of trade?

? < 1 copper < ?

Draw the new Consumption Possibilities Frontier (CPF) for these two countries (on the reverse side), assuming a world price of:

1 copper = 3 wine.

Expert Solution

From the given table, Ireland can either produce 120 units of wine or 60 units of copper using all its resources.

Similarly, Peru can either produce 500 units of wine or 100 units of copper using all its resources.

a. Here, as Peru can produce more of both the goods, Peru has absolute advantage in the production of both the goods (wine and copper).

b. Opportunity cost of producing 1 copper in Ireland = units of wine sacrificed/units of copper produced = 120/60 = 2 wine

c. Opportunity cost of producing 1 copper in Peru = units of wine sacrificed/units of copper produced = 500/100 = 5 wine

d. As opportunity cost of producing copper is lower for Ireland, Ireland has comparative advantage in the production of copper.

e. Peru has comparative advantage in the production of wine.

f. Terms of trade lies in the range : 2 wine per copper < TOT < 5 wine per copper

or, 0.5 copper per wine > TOT > 0.2 copper per wine

g. If world price is 1 copper = 3 wine, we have shown CPF and PPF for both countries as follows:

Rahul Sunny answered 9 months ago

Combination apples( thousands /kg) grapes(thousand/kg) A 180 0 B 150 10 C 120 20 D 60...

Combination apples( thousands /kg) grapes(thousand/kg) A 180 0 B 150 10 C 120 20 D 60 30 E 30 40 F 0 50 a. Based on table above, Plot the Production Possibilities Curve (PPC) (2Marks) b.What the opportunity cost of producing 20 thousand KG of Grapes (Show your working) (2Marks) c.What the opportunity cost of producing 150 thousand KG of Apples. (Show your working) d.If this country wants to produces 30 thousand kg of apples and 20 thousand kg of...

Use the production possibilities tables to answer the following questions. Germany’s Production Possibilities A B C...

Use the production possibilities tables to answer the following questions. Germany’s Production Possibilities A B C D E F Autos (millions) 0 4 8 12 16 20 Chemicals (millions) 40 32 24 16 8 0 United States’ Production Possibilities A B C D E F Autos (millions) 0 3 6 9 12 15 Chemicals (millions) 60 48 36 24 12 0 If Germany and the United States engage in trade, the mutually beneficial terms of trade will be between _____...

1. Consider the following Production Possibilities Frontier. (Chapter 1) Goods Possibilities _______________________________________________ A B C...

1. Consider the following Production Possibilities Frontier. (Chapter 1) Goods Possibilities _______________________________________________ A B C D E Capital Goods 5 4 3 2 0 Consumer Goods 0 5 9 12 14 _______________________________________________ a. Use the information in the above table to show the production possibilities frontier (PPF) graphically. Mark the attainable and efficient, attainable but inefficient, and unattainable possibilities. Explain in words what the frontier (the curve) shows us. b. Explain the reason its shape is “bowed out?”?” Under...

A thumbs up will be given: Table 1 t A B C D 0 (14,900,000)...

A thumbs up will be given: Table 1 t A B C D 0 (14,900,000) (17,900,000) (16,600,000) (19,700,000) 1 4,980,000 5,990,000 3,850,000 6,400,000 2 4,980,000 6,210,000 4,990,000 5,880,000 3 4,510,000 6,250,000 6,860,000 6,800,000 4 4,510,000 4,700,000 4,990,000 6,650,000 Risk High Average Low Average Table 1 shows the expected after-tax operating cash flows for each project. All projects are expected to...

A B C PRODUCT PRICE LARGE SCREEN 100 110 120 $12 MED SCREEN 70 60 $10...

A B C PRODUCT PRICE LARGE SCREEN 100 110 120 $12 MED SCREEN 70 60 $10 SMALL SCREEN 50 40 30 $8 Please answer the next 6 questions based on the information provided in the table above for a profit-maximizing firm producing HD TVs. Any of the three output combinations of HD TVs can be produced for the same cost. And to produce any one of the combinations requires that the firm operate at full capacity. The profit associated with...

The colour of copper sulphide is (a) Blue (b) Black (c) Red (d) Green

The colour of copper sulphide is________. (a) Blue(b) Black(c) Red(d) Green

Examine the production possibilities schedule below. Production Possibility Cupboards Tables A 0 14 B 1 12...

Examine the production possibilities schedule below. Production Possibility Cupboards Tables A 0 14 B 1 12 C 2 9 D 3 5 E 4 0 Calculate the opportunity cost for each addition cupboard being produced. Use the production possibilities schedule to graph a production possibilities curve. Mark a point F on the graph that indicates unemployed resources for the Pinetree Furniture Company. Can the Pinetree Furniture Company produce 8 tables and 3 cupboards during the same year? Mark this production...

a b c d f 0 0 0 0 0 0 0 0 1 0 0...

a b c d f 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 1 1 0 0 1 0 0 1 0 1 0 1 1 0 1 1 0 1 0 1 1 1 1 1 0 0 0 0 1 0 0 1 1 1 0 1 0 1 1 0 1 1 1 1 1 0 0 0 1 1 0 1 1 1 1 1 0 1...

A = -7.25, B = $200, C = $80, D =$140, E= $120, F= $40 and...

A = -7.25, B = $200, C = $80, D =$140, E= $120, F= $40 and G = $20. You are a profit-maximizing firm. Suppose there are two types of customers (50% of 1 type, 50% of the other) who shop in your specialty clothing store. Consumers of type R will pay __B__ for a coat and __C__ for pants. Consumers of type S will pay __D__ for a coat and __E__ for pants. Your firm faces no competition and...

The following reactions take place in a batch reactor: A+B--> C (desired product) B+C-->D (hazardous product)...

The following reactions take place in a batch reactor: A+B--> C (desired product) B+C-->D (hazardous product) As the reaction proceeds, D builds up in the reactor and could cause an explosion if its concentration exceeds 15 mol/L. To ensure the safety of the plant personnel, the reaction is quenched (e.g., by cooling the reactor contents to a low temperature) and the products are extracted when the concentration of D reaches 10mol/L. The concentration of C is measured in real-time, and...