s page Table 3-8 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate. England Spain Labor Hours Needed to Make 1 Unit of Cheese 2 3 Bread 3 6 Number of Units Produced in 24 Hours Cheese Bread 12 8 S 4 Refer to Table 3-8. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring bread along the horizontal axis, then a. the slope of England's production possibilities frontier would be -2 and the slope of Spain's production possibilities frontier would be -5. b. the slope of England's production possibilities frontier would be -.75 and the slope of Spain's production possibilities frontier would be -1. c. the slope of England's production possibilities frontier would be -0.67 and the slope of Spain's production possibilities frontier would be-0.5. O d. the slope of England's production possibilities frontier would be -1.5 and the slope of Spain's production possibilities frontier would be -2 O Q Tim kiem Next page

How do trade barriers affect the average Income level in an economy?

Does intra-industry trade contradict the theory of comparative advantage?

If trade increases world GDP by 1 per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss. Hint To answer this question, here are steps you may want to consider. Go to the World Development Indicators (online) published by the World Bank. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lankas GDP.

How does comparative advantage lead to gains from trade?

Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram onto a sheet of paper and then add a foreign county as a third agent. Draw a rough sketch of the flows of imports, exports, and the payment for each on your diagram.

France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week. Draw a production possibilities frontier for each country. Hint: Remember the production possibility frontier is the maximum that all workers can produce at a unit of time which, in this problem, is a week. Identify which country has the absolute advantage in green beans and which country has the absolute advantage in tomatoes. Identity which country has the comparative advantage. How much would France have to give up In terms of tomatoes to gain from trade? How much would it have to give up in terms of green beans?