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 B. 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

Please answer 1 and 2

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Suppose that opportunity costs are constant in both France and Italy. In France, maximum feasible hourly production levels are either 3 units of wheat or 5 units of wine. In Italy, maximum feasible hourly production levels are either 4 units of wheat or 10 units of wine. It is correct to state that A. Italy has a comparative advantage in producing wine. B. France has a comparative advantage in producing both wheat and wine. C. Italy has a comparative advantage in producing both wheat and wine. D. France has a comparative advantage in producing wine.

Refer to Table 1-1  Which country has an absolute advantage in the production of bread?  Group of answer choices Derryland Whetonia

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David and Morgan are farmers. Each one owns a 14-acre plot of land. The following table shows the amount of watermelon and zucchini each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing watermelon or zucchini or to produce watermelon on some of the land and zucchini on the rest. Watermelon (Pounds per acre) Zucchini David 10 (Pounds per acre) 5 Morgan 18 6 On the following graph, use the blue line (circle symbol) to plot David's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Morgan's PPF. 140 126 (spunod) II 112 98 84 70 David's PPF Morgan's PPF (?)

3. Gains from trade Suppose there exist two imaginary countries, Sequoia and Glacier. Their labor forces are each capable of supplying four million hours per day that can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be produced by one hour of labor. Pistachios Chinos Country (Pounds per hour of labor) (Pairs per hour of labor) Sequoia Glacier 5 8 20 16 Suppose that initially Glacier uses 1 million hours of labor per day to produce pistachios and 3 million hours per day to produce chinos, while Sequoia uses 3 million hours of labor per day to produce pistachios and 1 million hours per day to produce chinos. As a result, Sequoia produces 15 million pounds of pistachios and 20 million pairs of chinos, and Glacier produces 8 million pounds of pistachios and 48 million pairs of chinos. Assume there are no other countries willing to engage in trade, so, in the absence of trade between these two…

Figure 2.2. Canadian Trade Possibilities Televisions 16 12 8 4 0 Canada's Transformation Schedule Televisions 8 12 International Terms of Trade Refrigerators Televisions and refrigerators Neither televisions nor refrigerators с 16 20 B 24 Figure 2.2 shows a straight-line production possibilities curve with televisions on the vertical axis and refrigerators on the horizontal axis for Canada. The intercept on the vertical axis equals 16 and on the horizontal axis equals 24. Point A shows a point where an indifference curve is tangent to the production possibilities curve where televisions on the vertical axis equal 8 and refrigerators on the horizontal axis equal 12. A downward sloping straight line representing the international terms of trade starts at a point where refrigerators equal 24; an indifference curve is tangent to this line at a point where televisions equal 12 and refrigerators equal 16. Referring to Figure 2.2, Canada has a comparative advantage in: Refrigerators