(A) roydes PPC Japan PPC in Vetnam In reference to the above graph, suppose Vietnam and Japan are producing and consuming at points A and D, respectively. If they agree on the price shown on the graph (the slope of the tangent line), then Vietnam will end up consuming a. motorcycles equal to JG. b.motorcycles equal to AG. Oc motorcycles equal to HG. d. an amount not shown on this graph. (B) Comparative advantage is primarily concerned with Oa. demand conditions. Ob. regulatory conditions. Oc. relative costs conditions. Od. supply conditions.
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- Steel (millions of tons) 8 30 20- 10 0 Country A Production possibilition curve 10 20 30 40 Chemicals (millions of tons) From the diagrams, it can be seen that 50 Steel (millions of tons) 8 20 10 0 Country B Production possibilities curve 10 20 30 40 Chemicals (millions of tons) O the slopes of the two curves indicate both countries will specialize in chemicals. O country B has an absolute advantage in both commodities. O it is more costly in terms of resources to produce steel in country A. O country B has a comparative advantage in chemicals. O country A has a comparative advantage in both commodities. 50Question 1A. Define and explain the theory of comparative advantage (use an example ifnecessary).B. Discuss limitations of comparative advantage (Include in your answer at leastfive key limitations to this theory).C. Spencer Grant is a New York-based investor. He has been closely following hisinvestment in 100 shares of Vaniteux, a French firm that went public in Februaryof 2010. When he purchased his 100 shares at €17.25 per share, the euro wastrading at $1.360/€. Currently, the share is trading at €28.33 per share, and thedollar has fallen to $1.4170/€.a If Spencer sells his shares today, what percentage change in the share pricewould he receive?What is the percentage change in the value of euro versus the dollar overthis same period?What would be the total return Spencer would earn on his shares if he soldthem at these rates?Wichita — Farmers in Kansas, the biggest US producerof wheat, are abandoning their crops damaged by severedrought and cold.Some are spraying wheat fields with crop-killingchemicals and claiming insurance payouts in the beliefthat it is not worth harvesting the little grain that thereis, Reuters found on a three-day tour of the state. Othergrowers let cattle graze on the dismal-looking fields.Abandoning fields will reduce the crop of the world’sfifth-largest wheat exporter, with stocks expected to fallto a 16-year low. Large-scale abandonment deals aneconomic blow to farm towns and force wheat buyersto adjust procurement plans by buying the staple grainelsewhere.Nationally, winter-wheat farmers plan to abandon 33%of the acres they planted, the highest percentage sinceWorld War 1, the US department of agriculture said ina May 12 report.Kansas farmers are expected to abandon about 19% ofthe area planted last autumn, up from 10% in 2022 and4% in 2021, according to the report. But farmers,…
- Wichita — Farmers in Kansas, the biggest US producerof wheat, are abandoning their crops damaged by severedrought and cold.Some are spraying wheat fields with crop-killingchemicals and claiming insurance payouts in the beliefthat it is not worth harvesting the little grain that thereis, Reuters found on a three-day tour of the state. Othergrowers let cattle graze on the dismal-looking fields.Abandoning fields will reduce the crop of the world’sfifth-largest wheat exporter, with stocks expected to fallto a 16-year low. Large-scale abandonment deals aneconomic blow to farm towns and force wheat buyersto adjust procurement plans by buying the staple grainelsewhere.Nationally, winter-wheat farmers plan to abandon 33%of the acres they planted, the highest percentage sinceWorld War 1, the US department of agriculture said ina May 12 report.Kansas farmers are expected to abandon about 19% ofthe area planted last autumn, up from 10% in 2022 and4% in 2021, according to the report. But farmers,…u work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, flopsicles, and mookies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of splishy splashies increases by 4%, the quantity of flopsicles sold increases by 1% and the quantity of mookies sold decreases by 5%. Your job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the…Figure 3-1 CI 2: Wheat Wheat 10 Corn Corn Refer to Figure 3-1. Assume that Cliff and Paul were both producing wheat and corn, and each was dividing their time equally between the two. Then they decide to specialize in the product they have a comparative advantage in and trade 3 bushels of wheat for 3 bushels of corn. What would Cliff now be able to consume? 4 bushels of wheat and 3 bushels of corn 3 bushels of wheat and 4 bushels of corn 3 bushels of wheat and 3 bushels of corn 2 bushels of wheat and 3 bushels of corn
- K Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. United States Mexico Hamburgers (in tons) 0 40 80 120 Which country has an absolute advantage in producing tacos? Mexico Tacos (in tons) 108 72 36 0 Hamburgers (in tons) 0 8 16 24 Tacos (in tons) 60 40 20 Which country has a comparative advantage in producing tacos? The United States Suppose the United States is currently producing 80 tons of hamburgers and 36 tons of tacos and Mexico is currently producing 16 tons of hamburgers and 20 tons of tacos. If the United States and Mexico each specialize in producing only one good (the good for which each has a comparative advantage), then a total of additional ton(s) of hamburgers can be produced for the two countries combined (enter a numeric response using an integer) and a total of additional ton(s) of tacos can be produced.Comparative and absolute advantage Antonio and Caroline are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley (Bushels per acre) (Bushels per acre) Antonio 40 8 Caroline 28 7 On the following graph, use the blue line (circle symbol) to plot Antonio's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Caroline's PPF. Antonio's PPFCaroline's PPF01002003004005006007008009001000200180160140120100806040200BARLEY (Bushels)ALFALFA (Bushels) _______ has an absolute advantage in the production of alfalfa, and ______ has an absolute advantage in the production of barley. Antonio's opportunity cost of producing 1 bushel of barley is…Glacier has a comparative advantage in the production of a comparative advantage in the production of Congaree specialize in the production of the goods in which each After specialization, the two countries can produce a total of and million pounds of basil. Suppose that Glacier and Congaree agree to trade. Each country focuses its resources on producing only the good in which it has a comparative advantage. The countries decide to exchange 16 million pounds of corn for 16 million pounds of basil. This ratio of goods is known as the price of trade between Glacier and Congaree. The following graph shows the same PPF for Glacier as before, as well as its initial consumption at point A. Place a black point (plus symbol) on the graph to indicate Glacier's consumption after trade. Note: Dashed drop lines will automatically extend to both axes. BASIL (Millions of pounds) 64 56 BASIL (Millions of pounds) 48 40 32 24 16 8 0 64 56 40 0 48 PPF 24 8 PPF 0 8 0 16 The following graph shows the same…
- The New York Times (Nov. 30, 1993) reported that “the inability of OPEC to agree last week to cut production has sent the oil market into turmoil . . . [leading to] the lowest price for domestic crude oil since June 1990.” Statements True False The members of OPEC were trying to agree to cut production so they could save more oil for the future. OPEC was unable to agree on cutting production because each country has an incentive to cheat on any agreement. The newspaper also noted OPEC's view “that producing nations outside the organization, like Norway and Britain, should do their share and cut production.” What does the phrase “do their share” suggest about OPEC's desired relationship with Norway and Britain? OPEC would like Norway and Britain to act competitively. OPEC would like Norway and Britain to keep their production levels high. OPEC would like Norway and Britain to join the cartel.The countries of Nickeltown and Lykesville each produce two goods: Ovens and Dishwashers. The table below lists the production for each good, for each country per year when each country uses half of their resources to produce each good. Country Production of Ovens Production of Dishwashers Nickeltown 105 Lykesville 147 What is the opportunity cost of producing 1 Ovens in Nickeltown Dishwashers 70 42 What is the opportunity cost of producing 1 Ovens in Lykesville Dishwashers ONickeltown OLykesville ONot enough information Which country has a comparative advantage in producing Ovens?May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)