Macroeconomics (Fourth Edition)
Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
Question
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Chapter 19, Problem 4E

a)

To determine

The price of a bottle of beer in each economy if there is no trade.

b)

To determine

The export of beer and chips in each country.

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Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. If these two countries specialize in trade according to their comparative advantage, which of the following would not be true? A) Grease will specialize in and export fish B) more of each good can be consumed in both countries C) Greece will benefit from trade more than Germany D) Some individuals in each country will be hurt Can you help me with this
Suppose there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. For Nebraska the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat. At present, Iowa produces 20 million bushels of wheat and 120 million bushels of corn, while Nebraska produces 20 million bushels of corn and 120 million bushels of wheat.   a. If each state specialized in their respective comparative advantage:   Iowa would produce  million bushels of corn and  million bushels of wheat.   Nebraska would produce  million bushels of wheat and  million bushels of corn.     Now assume Nebraska trades 120 million bushels of wheat for 120 million bushels of corn. With specialization and this trade, Nebraska will end up with  million bushels of corn and  million bushels of wheat, while Iowa will end up with   million bushels of corn and   million bushels of wheat.   b.…
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