Question

In: Economics

3. The following table represents increasing cost production possibilities for the US and the rest of...

3. The following table represents increasing cost production possibilities for the US and the rest of the world (ROW):

Possibilities Curve Possibilities Curve

Wheat Cloth Wheat Cloth

0 120 0 200

40 116 40 192

80 100 80 180

120 76 120 160

160 40 160 120

200 0 180 0

Using indifference curves and production possibilities curves, determine

A. equilibrium relative prices at which production and consumption take place before trade, for both the US and ROW.

B. What is the range of prices within which trade would be mutually beneficial for both the US and ROW?

C. After specializing in production, determine the points at which consumption takes place if the US and ROW exchange 20 bushels of wheat for 20 yards of cloth, i.e. international relative price =1.

D. Derive the offer curves for the US and ROW.

E. Use supply and demand curves to examine the cloth market before and after trade in both the US and ROW.

Expert Solution

Rahul Sunny answered 1 year ago

The following represents the production possibilities in the following two countries. Canada &

The following represents the production possibilities in the following two countries. Canada Mexico Good X Good Y Good X Good Y 0 32 0 24 4 24 4 18 8 16 8 12 12 8 12 6 16 0 16 0 (a) Which country has a comparative advantage at producing Good X? (b) How can you tell? (Hint: opportunity cost) (c) Which country has a comparative advantage at producing Good Y? (d) Indicate how both countries can gain from trade?

3. The following table describes the production possibilities of two cities in the country of Baseballia:...

3. The following table describes the production possibilities of two cities in the country of Baseballia: (12 points) Pairs of Red Socks per Worker per Hour Pairs of White Socks per Worker per hour Boston 3 3 Chicago 2 1 ? a. Without trade, what is the price of white socks (in terms of red socks) in Boston? Answer: b. Without trade, what is the price of white socks (in terms of red socks) in Chicago? Answer: c. If the...

Use the following table to answer the question below. Dave's Production Possibilities Schedule Simon's Production Possibilities...

Use the following table to answer the question below. Dave's Production Possibilities Schedule Simon's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn Pounds of Green Beans Pounds of Corn 0 160 0 80 20 120 40 60 40 80 80 40 60 40 120 20 80 0 160 0 Assume Dave consumes 40 pounds of green beans and 80 pounds of corn without trade. Also, assume that Simon consumes 80 pounds of green beans and 40 pounds of...

Use the following table to answer the question. Dave's Production Possibilities Schedule Simon's Production Possibilities Schedule...

Use the following table to answer the question. Dave's Production Possibilities Schedule Simon's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn Pounds of Green Beans Pounds of Corn 0 160 0 80 20 120 40 60 40 80 80 40 60 40 120 20 80 0 160 0 Assume Dave consumes 40 pounds of green beans and 80 pounds of corn without trade. Also, assume that Simon consumes 80 pounds of green beans and 40 pounds of corn...

Increasing opportunity cost along a bowed-out production possibilities frontier occurs because?

Following is a production possibilities table for two goods: Trucks and mobiles. The table is constructed...

Following is a production possibilities table for two goods: Trucks and mobiles. The table is constructed using the usual assumptions. Choices Trucks (T) Mobiles (M) The opportunity cost for trucks A 0 110 B 1 105 C 2 96 D 3 84 E 4 63 F 5 36 G 6 0 What are the assumptions of drawing the PPF or PPC? What are the shift factors of the PPF or PPC? What is the opportunity cost of 3rd and 5th...

Below is the production possibilities table for the country of Lavaland.

Below is the production possibilities table for the country of Lavaland. (8 Points)Choice Number of tanks Number of pizzaA 0 15B 4 14C 7 12D 9 9E 11 5F 12 0If the economy starts at point A with production of 0 tanks and 15 pizzaWhat is the opportunity cost of producing 4 tanks more?What is the opportunity cost of one tank more? Show you calculation to receive full credit.What is the opportunity cost of one tank more if this economy...

Answer the question on the basis of the data given in the following production possibilities table....

Answer the question on the basis of the data given in the following production possibilities table. Production Possibilities (Alternatives) A B C D E F Capital Goods 5 4 3 2 1 0 Consumer Goods 0 5 9 12 14 15 Refer to the table. A total output of 3 units of capital goods and 4 units of consumer goods Multiple Choice is irrelevant because the economy is capable of producing a larger total output. will result in the maximum...

he following table represents the cost to ship from Distribution Center 1, 2, or 3 to...

he following table represents the cost to ship from Distribution Center 1, 2, or 3 to Customer A, B, or C. The demand for customer A and customer C should be at least 200 and 400 respectively. Distribution center 2 should have at most 400 items. Customer DC A B C Supply 1 4 6 8 500 2 5 2 7 400 3 3 5 9 300 Demand 200 350 400 Part A; Develop a network representation of the distribution...

The following table represents the percentage of voters, by age, who favor increasing the minimum wage...

The following table represents the percentage of voters, by age, who favor increasing the minimum wage in a particular city. Ages 18 - 29 30 - 39 40 - 49 50 - 59 60 and up Percentage 70% 30% 35% 15% 20% a) Would a pie chart be appropriate for this data? Explain why or why not. b) Would a Pareto chart be appropriate for this data? Explain why or why not.