Consider two neighboring island countries called Arcadia and Euphoria. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Rye Country (Bushels per hour of labor) Arcadia 8 Euphoria 5 Jeans (Pairs per hour of labor) 16 20 Initially, suppose Arcadia uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Arcadia produces 8 million bushels of rye and 48 million pairs of jeans, and Euphoria produces 15 million bushels of rye and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so in the absence of trade between these two countries, each country consumes the amount of rye and jeans it produces. of jeans, and Euphoria's opportunity cost of producing 1 bushel of rye is has a comparative advantage in the production of rye, and has a comparative Arcadia's opportunity cost of producing 1 bushel of rye is of jeans. Therefore, advantage in the production of jeans. Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces rye will produce million bushels per week, and the country that produces jeans will produce million pairs per week.

Consider two neighboring island countries called Euphoria and Bellissima. They each have 4 million labor hours available per week that they can use to produce rye, jeans, or a combination of both. The following table shows the amount of rye or jeans that can be produced using 1 hour of labor. Country Rye Jeans (Bushels per hour of labor) (Pairs per hour of labor) Euphoria 4 16 Bellissima 6 12   Initially, suppose Bellissima uses 1 million hours of labor per week to produce rye and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce rye and 1 million hours per week to produce jeans. Consequently, Euphoria produces 12 million bushels of rye and 16 million pairs of jeans, and Bellissima produces 6 million bushels of rye and 36 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of rye and…

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Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the absolute advantage in wine?     a) Portugal     b) England     c) Both     d) Neither     e) Can't tell

A great nation of Wakanda has two sectors. The largest sector of the economy involves mining vibranium, refining it, and using it for producing vibranium shields. The second sector is about mining and polishing infinity stones. Wakanda sells both vibranium shields and infinity stones on the underground intergalactic markets. identify and briefly explain if and how each of the following affects Wakanda's production possibilties frontier (will it shift or tilt, upward or inward, etc.) (a) A new deposit of vibranium has been discovered recently, The new discovery make vibranium miners (but not infinity stone miners) much more productive. (b) Due to increased intergalactic hostilities, demand for infinity stones has dropped dramatically.

Consider two neighboring island countries called Euphoria and Contente. They each have 4 million labor hours available per week that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. Country Corn Jeans (Bushels per hour of labor) (Pairs per hour of labor) Euphoria 8 32 Contente 12 24   Initially, suppose Contente uses 1 million hours of labor per week to produce corn and 3 million hours per week to produce jeans, while Euphoria uses 3 million hours of labor per week to produce corn and 1 million hours per week to produce jeans. Consequently, Euphoria produces 24 million bushels of corn and 32 million pairs of jeans, and Contente produces 12 million bushels of corn and 72 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of corn…

Apple Republic and Banana Republic have 60,000 workers and 120,000 workers, respectively, and labor is the only factor of production. Unit labor requirements for both countries are given in the table below. Units of labor required per unit of output Banana Apple 4 2 Compute relative autarky price ratios (price of pork relative to that of fish) for both countries, defined as Pp/PF. Pork Fish 4 8

23. Assuming labor is the only resource and England has 60 man-hours (mhrs) and Portugal 180 mhrs of labor resource available for production, which country has the absolute advantage in cloth?     a) Portugal     b) England     c) Both     d) Neither     e) Cannot tell

Suppose the fictional country of Everglades produces only two goods: sorghum and telephoto lenses. The following graph plots Everglades's current production possibilities frontier, and includes six different output combinations given by black points (plus symbols) labeled A to F. 80 PPF 60 K E + 40 20 A B C D 100 TELEPHOTO LENSES (Millions) Point Inefficient E F 0 0 ++ Complete the following table by indicating whether each point represents output combinations that are inefficient, efficient, or unattainable. Check all that apply. 0 C r 20 0 60 SORGHUM (Millions of bushels) Efficient 00 0 40 0 X8 C D Unattainable 0 0 00 80 100

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