The bolded wording is the answer choices for the drop-down arrows it has 4 answer choices Euphoria's opportunity cost of producing 1 pair of jeans is a) 1/2 b) 1/4 c) 2 d) 4 of corn, and Arcadia's opportunity cost of producing 1 pair of jeans is a) 1/2 b) 1/4 c) 2 d) 4 of corn.Therefore, a) Euphoria b) Arcadia has a comparative advantage in the production of jeans, and a) Euphoria b) Arcadia and has a comparative advantage in the production of corn. Euphoria Trade Actions (Jeans) a) Exports 14 b) Imports 14Trade Actions (Corn) a) Exports 42 b) Imports 42 ArcadiaTrade Actions (Jeans) a) Exports 14 b) Imports 14Trade Actions (Corn) a) Exports 42 b) Imports 42 In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," andenter each country's final consumption of each good on the line marked "Consumption."When the two countries did not specialize, the total production of jeans was 18 million pairs per month, and the total production of corn was 52 millionbushels per month. Because of specialization, the total production of jeans has increased bymillion pairs per month, and the total productionof corn has increased bymillion bushels per month.Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of thetable. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").EuphoriaArcadiaJeansCornJeansCorn(Millions of pairs)(Millions of bushels)(Millions of pairs)(Millions of bushels)Without TradeProduction121636Consumption1216636With TradeProductionTrade actionConsumptionGains from TradeIncrease in Consumption Consider two neighboring island countries called Euphoria and Arcadia. They each have 4 million labor hours available per month that they can use toproduce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.JeansCornCountry(Pairs per hour of labor)(Bushels per hour of labor)Euphoria416Arcadia612Initially, suppose Arcadia uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn, while Euphoria uses3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Euphoria produces 12 million pairsof jeans and 16 million bushels of corn, and Arcadia produces 6 million pairs of jeans and 36 million bushels of corn. Assume there are no othercountries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn itproduces.Euphoria's opportunity cost of producing 1 pair of jeans isof corn, and Arcadia's opportunity cost of producing 1 pair of jeans isv of corn. Therefore,has a comparative advantage in the production of jeans, andhas a comparativeadvantage in the production of corn.Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. Inthis case, the country that produces jeans will producemillion pairs per month, and the country that produces corn will producemillion bushels per month.In the following table, enter each country's production decision on the third row of the table (marked "Production").Suppose the country that produces jeans trades 14 million pairs of jeans to the other country in exchange for 42 million bushels of corn.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The bolded wording is the answer choices for the drop-down arrows it has 4 answer choices

Euphoria's opportunity cost of producing 1 pair of jeans is a) 1/2 b) 1/4 c) 2 d) 4

of corn, and Arcadia's opportunity cost of producing 1 pair of jeans is a) 1/2 b) 1/4 c) 2 d) 4 of corn.

Therefore, a) Euphoria b) Arcadia has a comparative advantage in the production of jeans, and a) Euphoria b) Arcadia and has a comparative advantage in the production of corn.

Euphoria

Trade Actions (Jeans) a) Exports 14 b) Imports 14

Trade Actions (Corn) a) Exports 42 b) Imports 42

Arcadia

Trade Actions (Jeans) a) Exports 14 b) Imports 14

Trade Actions (Corn) a) Exports 42 b) Imports 42

In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and
enter each country's final consumption of each good on the line marked "Consumption."
When the two countries did not specialize, the total production of jeans was 18 million pairs per month, and the total production of corn was 52 million
bushels per month. Because of specialization, the total production of jeans has increased by
million pairs per month, and the total production
of corn has increased by
million bushels per month.
Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.
Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the
table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").
Euphoria
Arcadia
Jeans
Corn
Jeans
Corn
(Millions of pairs)
(Millions of bushels)
(Millions of pairs)
(Millions of bushels)
Without Trade
Production
12
16
36
Consumption
12
16
6
36
With Trade
Production
Trade action
Consumption
Gains from Trade
Increase in Consumption

Consider two neighboring island countries called Euphoria and Arcadia. They each have 4 million labor hours available per month that they can use to
produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.
Jeans
Corn
Country
(Pairs per hour of labor)
(Bushels per hour of labor)
Euphoria
4
16
Arcadia
6
12
Initially, suppose Arcadia uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn, while Euphoria uses
3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Euphoria produces 12 million pairs
of jeans and 16 million bushels of corn, and Arcadia produces 6 million pairs of jeans and 36 million bushels of corn. 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 jeans and corn it
produces.
Euphoria's opportunity cost of producing 1 pair of jeans is
of corn, and Arcadia's opportunity cost of producing 1 pair of jeans is
v of corn. Therefore,
has a comparative advantage in the production of jeans, and
has a comparative
advantage in the production of corn.
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 jeans will produce
million pairs per month, and the country that produces corn will produce
million bushels per month.
In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces jeans trades 14 million pairs of jeans to the other country in exchange for 42 million bushels of corn.

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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