ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- The graph shows Spain's demand for oranges and the supply of oranges by growers in Spain. The world price of oranges is €1.00 a pound. Draw and label the world price line. Suppose there is free international trade. Draw a point to show the quantity of oranges bought by Spanish consumers and the price they pay. Label it 1. Draw a point to show the quantity of oranges supplied by Spanish producers and the price at which these oranges are sold. Label it 2. With free international trade, Spain produces and some at the lower world price. imports exports W oranges than in the situation with no international tradearrow_forwardThe countries of Sanaton and Microtania each produce two goods: Airplanes and Computers. The table below lists the opportunity costs associated with producing each good, for each country. Country Opportunity cost of producing 1 Airplanes Opportunity cost of producing 1 Computers Sanaton 4 Computers 0.25 Airplanes 2 Airplanes Microtania 0.5 Computers Currently, Sanaton does not trade with Microtania, and on its own produces 19 Airplanes and 24 Computers. On their own, Microtania produces 30 Airplanes and 35 Computers. Calculate total world supply: Airplanes: → Computers: If Sanaton decided to change its production of Airplanes by -2, calculate the change in the production of Computers: If Microtania changed its production of Airplanes by 8, calculate the change in production of Computers: Aarrow_forward56 56 48 48 PPF 40 40 32 32 24 PPF 24 16 16 -- -- -- - 8 16 24 32 40 48 56 64 16 24 32 40 48 56 84 GRAIN (Millions of pounds) GRAIN (Millions of pounds) Maldonia has a comparative advantage in the production of while Lamponia has a comparative advantage in the production of Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a comparative advantage. After specialization, the two countries can produce a total of million pounds of sugar and million pounds of grain. Suppose that Maldonia ánd Lamponia 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 24 million pounds of grain for 24 million pounds of sugar. This ratio of goods is known as the price of trade between Maldonia and Lamponia. W SUGAR (MIlons of pounds) SUGAR (MIlions of pounds)arrow_forward
- Which country has comparative advantage in the production of food? Explain. See attached.arrow_forwardfrom the image, can you help answer whether the trade action for Felicidad: jeans is import 18 or export 18, Felicidad: corn import 54 or export 54, and Contente: jeans import 18 or export 18 and Contente: corn import 54 or export 54.arrow_forwardQuestion 28 The table shows the maximum quantity of cars or motorcycles that can be produced by two countries, X and Y, using equal amounts of resources. Motorcycles Cars 10 60 20 80 Based on the data in the table, which of the following is true? A B D Country X Country Y E Country X has a comparative advantage in producing cars. Country Y has a comparative advantage in producing cars. Country X has an absolute advantage in producing cars. Country X has an absolute advantage in producing motorcycles. Country Y has a comparative advantage in producing motorcycles.arrow_forward
- Can you help me with thisarrow_forwardIn Bangladesh, it takes 300 labor hours to produce one TV set and 5 hours of labor to produce one unit of textiles. The unit labor costs for the same goods in the U.S. are 100 labor hours to produce one TV and 2 labor hour to produce one unit of textiles. Tv Textiles 100 2 Bangladesh 300 5 U.S. Which country has an absolute advantage in the production of textiles? Which country has a comparative advantage in textiles? The * has an absolute advantage in the production of textiles as its unit labor costs are * than that of Bangladesh. The opportunity cost of textiles in the U.S is and in Bangladesh is * has a comparative advantage in textiles. Determine the range of international relative price of TV sets with respect to textiles. The range for the international relative price of the TV sets with respect to textiles is andarrow_forwardDo not use Aiarrow_forward
- 5arrow_forwardThe table below shows the production of oil and lumber of ONE worker in China and India: rice (in pounds) shirts (unit) CHINA 400 200 INDIA 330 110 a) BEFORE trade (or with no trade), each country has 100 workers, and they allocate the worker for the production of the goods in the following way: China allocates 35 workers in the production of rice, and 65 workers in the production of shirts; India allocates 50 workers in the production of rice and 50 workers in the production of shirts. Find the maximum production and consumption of both goods for each country! b) If the countries decide to engage in trade (WITH TRADE), they will specialize in the production of the good in which they have comparative advantage. In which good should China specialize? How about India? JUSTIFY! (To answer this question you must calculate the opportunity cost of each good for both countries and then find the country's comparative advantage). What is the WITH TRADE production of the countries? c) If the…arrow_forwardThe following diagrams show the production possibilities frontiers (PPFS) for Armenia and Azerbaijan and their production of milk and razor trade. Which of the following statements is true when the two countries begin trading in razors and milk? Razors 15 10 5 Armenia 10 15 Milk (gallons) O Armenia will not trade with Azerbaijan O Armenia will export milk to Azerbaijan and import razors from Azerbaijan. O Armenia will export razors to Azerbaijan and import milk from Azerbaijan O Armenia will import razors and milk from Azerbaijan.. Razors 15 10 10 5 Azerbaijan 10 15 5 Milk (gallons)arrow_forward
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