Figure 3: Two Production Possibilities Frontiers Britain United States 100 30 200 Assume the world consists hypothetically of only two countries that can produce only two products, in the same period, with the same fixed amount of resources, with the same highest technologies available worldwide, and with the simplified assumption of producing "along" a linear production possibility frontier (PPF). Figure 3 provides the production possibilities frontiers between Textiles (T) and Soybeans (S) in the United States (A) and Britain (B). Referring to Figure 3, which of the following is true according to David Ricardo's Comparative Advantage Theory? Only the United States can benefit from engaging in free international trade with Britain. O Neither Britain nor the United States can benefit from engaging in free international trade. Both Britain and the United States can benefit from engaging in free international trade. ONone of the above.

Figure 3: Two Production Possibilities Frontiers Britain United States 100 30 200 Assume the world consists hypothetically of only two countries that can produce only two products, in the same period, with the same fixed amount of resources, with the same highest technologies available worldwide, and with the simplified assumption of producing "along" a linear production possibility frontier (PPF). Figure 3 provides the production possibilities frontiers between Textiles (T) and Soybeans (S) in the United States (A) and Britain (B). Referring to Figure 3, which of the following is true according to David Ricardo's Comparative Advantage Theory? Only the United States can benefit from engaging in free international trade with Britain. O Neither Britain nor the United States can benefit from engaging in free international trade. Both Britain and the United States can benefit from engaging in free international trade. ONone of the above.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth

Section: Chapter Questions

Problem 9SQ

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Review the numbers for Canada and Venezuela from Table 33.12 which describes how many barrels of oil and tons of lumber the workers can produce. Use these numbers to answer the rest of this question. Draw a production possibilities frontier for each country. Assume there are 100 workers in each country. Canadians and Venezuelans desire both oil and lumber. Canadians want at least 2,000 tons of lumber. Mark a point on their production possibilities where they can get at least 3,000 tons. Assume that the Canadians specialize completely because they figured out they have a comparative advantage in lumber. They are willing to give up 1,000 tons of lumber. How much oil should they ask for in return for this lumber to be as well off as they were with no trade? How much should they ask for if they want to gain from trading with Venezuela? Note: We can think of this ask as the relative price or trade price of lumber. Is the Canadian ask you identified in (b) also beneficial for Venezuelans? Use the production possibilities frontier graph for Venezuela to show that Venezuelans can gain from trade.
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The graph below represents the Production Possibility Frontier for the country of OZ for 2 groups of goods or services: Infrastructure (like bridges and roads) and technology and research. Production Possibility Frontier - Country of Oz 12 10 0 2 4 6 8 10 12 14 16 18 20 22 Infrastructure From a point on the Production Possibility Frontier, the country of OZ can produce more infrastructure projects and more technology and research projects simultaneously but only up to a certain quantity. If the country of OZ is currently producing 15 infrastructure projects and wants to produce 4 more, they would give up 7 research and technology projects. If the country of OZ is currently producing 10 infrastructure projects and wants to produce 5 more, the opportunity cost would be 2 research and technology projects. The country of OZ can produce 15 infr tructure projects and 12 technology and research projects Technology and Research
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Visualize a PPF (Production Possibility Frontier/Curve) for two countries the United States and Taiwan. Both countries produce YO-YOs and Tennis Shoes. The PPF for the United States shows that on the X-Axis its Output for YO-YOs is 100 million (per year) and Y-Axis its Output for Tennis Shoes is 25 million (per year). The PPF for Taiwan shows that on the X-Axis its Output for YO-YOs is 20 million (per year) and Y-Axis its Output for Tennis Shoes is 10 million (per year). Considering the PPFs for both countries, the opportunity cost of producing 1 yo-yo in Taiwan is: Answers: A. 2 pairs of tennis shoes. B. One-half of a yo-yo. C. Greater than the opportunity cost in the United States. D. Equal to the opportunity cost of producing 1 yo-yo in the U.S.
Visualize a PPF (Production Possibility Frontier/Curve) for two countries the United States and Taiwan. Both countries produce YO-YOs and Tennis Shoes. The PPF for the United States shows that on the X-Axis its Output for YO-YOs is 100 million (per year) and Y-Axis its Output for Tennis Shoes is 25 million (per year). The PPF for Taiwan shows that on the X-Axis its Output for YO-YOs is 20 million (per year) and Y-Axis its Output for Tennis Shoes is 10 million (per year). Refer to the above PPF descriptions. Inspection of the linear PPFs of both countries illustrated reveals that: Answers: A. The United States cannot benefit from trading with Taiwan. B. Taiwan has no comparative advantage. C. Taiwan has comparative advantage in production of tennis shoes. D. None of the above
Imagine the following case study where two different countries: Albania and Belize have remained self-sufficient and mostly produce two of the following products: corn and beets. Our hopes are that we will be able to improve trade liberalization and encourage each one to work together in order to improve the number of resources and goods each one provides to their population. Here are their production levels for each product per worker/month (assume each country has a workforce for 15 workers): Bushels Corn (Y-аxis) Вets (X-аxis) Albania 40 20 Belize 20 4 Calculate and graph the Production possibilities frontiers for both countries. b) Assume that both countries currently prefer equal amounts of corn and beet for their production & consumption levels within their country, clearly label this point and call it point B: production/consumption before trade. c) Calculate and state the number of workers that would be required in order to produce points B for both countries. a) d) Complete…
scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. Labor Hours Number of Units Needed to Make Produced in 24 1 Unit of Hours Cheese Bread Cheese Bread England2 Spain 3 3 12 8 8 4 Which of the following statement is correct? England has the comparative advantage in Cheese Spain has the comparative advantage in Cheese England has the comparative advantage in both Cheese and Bread Spain has the comparative advantage in both Cheese and Bread
Please explain the roles of Production Possibility Curve in any economic system applied by any countries? And Do you agree that the economic growth shifts the PPC outward and makes it possible to have more of all commodities. It means economy ofa country in growing up faster? If Yes or Not, please provide your reasons as widely as possible? PLEASE GIVE DETAIL EXPLANATION