Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 26.2, Problem 1QQ
To determine
Production possibility frontier and opportunity cost .
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Students have asked these similar questions
Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000.
(d) Which country has the comparative advantage in food? In fuel? Explain.
(e) Which good(s) should each country specialize in?
QUESTION 10
These are some points on the production possibilities frontier for France written in the form (Cheese, Perfume)
A. (24, 0); B. (15, 4.5); C. (0, 12)
What happens to the opportunity cost of one unit of perfume as France moves from point A to B and from B to C on the PPF?
A. The opportunity cost of perfume remains the same
OB. The opportunity cost of perfume increases
OC. The opportunity cost of perfume decreases
OD. The opportunity cost of perfume remains the same from A to B and increases from B to C
In the specific model with two consumption goods and labour (mobile) and land and capital (specific factors), in Home in the market equilibrium with free international trade of goods (compared to autarky).Which statements are correct?
1.the economy does not achieve a Pareto improvement.
2.the profit of the capital owners increases.
3.a good that is exported cannot have a higher price.
4.consumption is strictly higher.
5.the price for land cannot be lower.
6.workers will be better off if they consumption demand is sufficiently biased toward imported goods.
7.the real wage will be higher
Chapter 26 Solutions
Microeconomics
Ch. 26.2 - Prob. 1QQCh. 26.2 - Prob. 2QQCh. 26.2 - Prob. 3QQCh. 26.2 - Prob. 4QQCh. 26 - Prob. 1DQCh. 26 - Prob. 2DQCh. 26 - Prob. 3DQCh. 26 - Prob. 4DQCh. 26 - Prob. 5DQCh. 26 - Prob. 6DQ
Ch. 26 - Prob. 7DQCh. 26 - Prob. 8DQCh. 26 - Prob. 9DQCh. 26 - Prob. 10DQCh. 26 - Prob. 11DQCh. 26 - Prob. 12DQCh. 26 - Prob. 13DQCh. 26 - Prob. 14DQCh. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQCh. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 1PCh. 26 - Prob. 2PCh. 26 - Prob. 3PCh. 26 - Prob. 4P
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- A country produces two goods: coconuts and umbrellas. Their production possibilities frontier (PPF) places coconuts on the x-axis and umbrellas on the y-axis. How would a drought that makes it difficult to grow coconuts but does not affect the production of umbrellas change the PPF? Neither the value of the x-intercept nor the y-intercept would change The value of the y-intercept would increase but the value of the x-intercept would not change The value of the x-intercept would increase but the value of the y-intercept would not change Both the value of the x-intercept and the y-intercept would increase The value of the y-intercept would decrease but the value of the x-intercept would not change The value of the x-intercept would decrease but the value of the y-intercept would not changearrow_forwardSuppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 units of Food or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5000. (c) Which country has the absolute advantage in food? In fuel? Explain. (d) Which country has the comparative advantage in food? In fuel? Explain. (e) Which good(s) should each country specialize in?arrow_forwardProduction Data Country of Joem - Production Possibilities Corn (tons) Sugar (tons) 2 3 4 2 0 8 1 Corn (tons) Sugar (tons) 6 Country of Annia - Production Possibilities Corn (tons) 1 2 3 Sugar (tons) 4 0 16 12 8 Preferred Bundle without trade Joem 2 4 Annia 2 8 4 0 4 0 SCENARIO: You work for a consulting firm that advises countries on trade policy. The countries of Joem and Annia both produce corn and sugar. You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 1. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the…arrow_forward
- Use the following information for the next two questions: the U.S. can produce 4 tons of potatoes per day or 2 tons of wheat per day. Ireland can produce 3 tons of potatoes per day or one ton of wheat. 17. The opportunity cost for Ireland producing one ton of potatoes is how many tons of wheat? а. one-fourth b. 1/3 с. 1 d. 3 The U.S. has the comparative advantage in producing potatoes. wheat. а. b. с. both. d. neither. It is possible to have a comparative advantage without having any absolute advantages. а. true b. falsearrow_forwardTechnology and Research 12 10 ∞ 0 Production Possibility Frontier - Country of Oz 0 2 4 6 8 10 12 Infrastructure 14 16 18 20 22 This graph 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. Which of the following statements is true? The country of OZ can produce 15 infrastructure projects and 12 technology and research projects. 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.arrow_forwardDraw the production possibility curve for each country using the data provided in the table. b. Which country has an absolute advantage in what product? Which country has a comparative advantage in what product? Show your work! c. Without trade, what is the price of food in terms of computers for both countries? Showyour work! d. What is the range of prices (i.e., the CPC) at which trade can occur? Also, show (a) the possible CPC for each country and (b) the possible production and consumption possibility lines for both countries after trade. Show your work!arrow_forward
- a. What is the opportunity cost of 1 ton of oranges for the nations of Argentina and Brazil, respectively?A. .25 ton of apples and .5 ton of applesB. 10 tons of apples and 4 tons of applesC. 2 tons of apples and 4 tons of apples D. 4 tons of apples and 2 tons of apples E. .5 ton of apples and .25 ton of apples b. What is the opportunity cost of 1 ton of apples for the nations of Argentina and Brazil, respectively?A. 4 tons of oranges and 2 tons of orangesB. 2.5 tons of oranges and .4 tons of orangesC. .25 tons of oranges and .5 tons of oranges D. 2 tons of oranges and 4 tons of oranges E. 5 tons of oranges and .25 tons of oranges c) Based on your answers in (a) and (b), which country will specialize in apples and which one in roanges? How did you figure this out?arrow_forwardConsider the production productivity matrix of two goods from the US and India: United States of America India Labor force 200 800 Labor per unit corn 8 50 Labor per unit automobile 10 40 6. In India, how many units of corn is it willing to give-up to produce a unit of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough data 7. The US, to achieve comparative advantage in producing a unit of corn, need to give-up how many unit(s) of automobile? Group of answer choices 0.8 1.25 Both 0.8 and 1.25 Not enough dataarrow_forwardFood (Comparative Advantage) The consumption possibilities frontiers shown by the blue lines in the following exhibit assume terms of trade of 1 unit of clothing for 1 unit of food. What would the consumption possibilities frontiers look like if the terms of trade were 1 unit of clothing for 2 units of food? Production (and Consumption) Possibility Frontiers with Trade (Millions of Units Per Day) (a) United States (b) Izodia 600 500- 400 600 500 U 400 300 200 U 100 Food 300 200 100 13 0 100 200 300 400 Clothing 0 100 200 300 400 Clothingarrow_forward
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