PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2RQ
To determine
The factors that helped the United States to become the world’s leading exporter of movies, books, and popular music.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Rising Bangladesh exports hold lessons for India: Eco Survey
NEW DELHI: The Economic Survey 2021 on Friday suggested that India can take some "lessons" from Bangladesh, a strong exporting nation, and focus on specialising in products in which it is competitive. It said that Bangladesh seems poised to emerge as a dominant exporter as its outbound shipments posted an impressive compounded annual growth rate (CAGR) of 8.6 per cent during 2011-2019, compared to 0.9 per cent for India and 0.4 per cent for the world.Bangladesh's share in world exports has increased from 0.1 per cent in 2011 to 0.3 per cent in 2019.The top five export commodities (from labour intensive sectors such as textiles, apparels and footwear) account for more than 90 per cent of the total exports of Bangladesh since 2015, it said.In case of India, on the other hand, export performance is more broad-based as the top five export commodities jointly constitute around 40 per cent of total exports and these goods are…
Consider a small country that exports steel. Suppose the following graph depicts the domestic demand and supply for steel in this country. One of the two price lines represents the world price of steel.
Because this country exports steel, the world price is represented by(p1 or p2) .
Suppose that a “pro-trade” government decides to subsidize the export of steel by paying $10 for each ton sold abroad.
With this export subsidy, the price paid by domestic consumers is $______
per ton, and the price received by domestic producers is$_______per ton. The quantity of steel consumed by domestic consumers (reamins unchanged, decrease, and increase) , the quantity of steel produced by domestic producers (reamins unchanged, decrease, and increase) , and the quantity of steel exported (reamins unchanged, decrease, and increase) .
True or False: With the export subsidy, this country will start importing steel from abroad.
Under the export subsidy, consumer surplus is…
Ghanaland is a land abundant country
producing cocoa and garments. Cocoa,
the land-intensive commodity is the
exportable and garments, which are
labour-intensive, are the importables.
Ghanaland is a small country in the
world economy. It takes the world price
of cocoa and garments as given. Assume
there is an influx of workers into
Ghanaland because of political
instability in a neighbouring country.
Explain the effect of this influx on the
production of cocoa and garments in
Ghana. [Hint: read up on the Rybczynski
theorem in any standard textbook on
international economics).
Chapter 2 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Similar questions
- Domestic producers of microprocessors send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of microprocessors. The lobbyist claims that the U.S. microprocessor industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on microprocessors, the domestic microprocessor industry could mature and adjust and would eventually be able to compete in the world market. Which of the following justifications is the lobbyist using to support their argument in favor of the trade restriction on microprocessors? National-security argument Infant-industry argument Unfair-competition argument Jobs argument Using-protection-as-a-bargaining-chip argumentarrow_forwardQ58. Your text has a discussion of various ways nations can skew income, production, and price-level data. Why would any nation choose to do so? to avoid paying its debts to avoid lower credit ratings or ease concerns of foreign investors to keep the rich from getting richer to increase its external wealth Q17. Suppose that the new international relative price of computers increases from the pre-trade price. If we then subtract the number of computers purchased domestically at the new international price from the number of computers produced, we will get one point on for computers. Shoes 500 225 U, 150 175 200 300 Computers the import demand curve the export supply curve the production possibilities frontier O the indifference curve O O O Oarrow_forwardQ5(5): Kutaro is a small island nation in the South Pacific. The inhabitants of Kutaro work to produce one of two goods: honey and clams. Recently Kutaro has begun to trade with other countries, and the Kutaran economy has adjusted to the international prices for honey and clams and is in equilibrium. The current international price for honey is $2 per jar, and the international price for clams is $16 per pound. a) If the Kutarans decide to give up producing 100 pounds of clams, how many more jars of honey could they produce? b) Now suppose that the Kutarans want to increase production of clams by 50 pounds. How many jars of honey must they give up to make this possible?arrow_forward
- Assume that you have been hired by an International Organization to be consulted on various issues that the country Motherland faces. For this exercise, assume that Motherland is a small agricultural economy. Assume that the biggest trading partner of Motherland is the United States. Unlike Motherland, the United States is a large industrial country. What type of trade model can best explain the trade between Motherland and the United States? Explain your answer in no more than 200 words. (4 marks)arrow_forwardAn expected decline in demand for consumer goods in the U.S. means there will be less imports into the U.S. Less imports in the U.S. translates to a reduction in exports from China, which is significant as the U.S. has the largest GDP of all nations. As the U.S. is reducing imports, it will be purchasing less goods from China, which means the U.S. will be giving up less dollars to purchase Chinese goods with the yuan. Will a decline in demand for consumer goods in the U.S. impact China's economy given the above information? If so, how would that affect the dollar-yuan exchange rate?arrow_forward“Exports pay for imports. Yet in 2007 the nations of the world exported about $709 billion more worth of goods and services to the United States than they imported from the United States.” Resolve the apparent inconsistency of these two statements.arrow_forward
- Statements. As one of the largest and most advanced countries in the world, the United States would not really benefit from trading with smaller, less developed countries. This is because the United States has the capacity to produce essentially all products in larger volumes than these countries. So in absolute terms, the United States has a larger production capacity and would only benefit from trading with other countries that can produce a certain product in higher volumes than it does.arrow_forwardJessica Alba, a famous actress, starts the baby and family products business, The Honest Company, with Christopher Gavigan. Alba and Gavigan set up their site so families can choose what kinds of non-toxic, all-natural products they'd like to use and get them in a bundle. Families can choose all kinds of products from food to hygiene necessities and cleaning supplies. Suppose they are thinking of expanding their business into five domestic markets: Phoenix, Dallas, Chicago, New York, and Atlanta. Assume their primary goal of business is to maximize economic profits, although they want to do business honestly.Show all your calculations and process. Describe your answer for each question in three- to five-complete sentences. You are a business adviser for Alba and Gavigan. Describe a skimming price and a penetration price, and advise them whether they should charge a skimming price or a penetration price, with supportive reasoning for and against each pricing alternative. Are they…arrow_forwardEcuador’s biggest export is crude petroleum (unprocessed), 63% of which it exports to the United States, and Ecuador’s biggest import is refined petroleum (processed), of which it imports 70% from the United States. Based on this information, which of the following statements is true? Group of answer choices Ecuador has comparative advantage in extracting crude petroleum; the US has comparative advantage in producing refined petroleum. Not enough information. The US has comparative advantage in extracting crude petroleum; Ecuador has comparative advantage in producing refined petroleum. Ecuador has absolute advantage in extracting crude petroleum and the US has absolute advantage in producing refined petroleum.arrow_forward
- Steel is produced only in the US and the rest of the world (ROW). The inverse demand and supply in the US are p = 110 - Q8 and p = 20 + Qỗ, while in the ROW, they are p = 70 - Q and p = Qk. All quantities are in millions of tons and all prices are in dollars per ton. Since steel is produced more cheaply in the ROW, the US imports it from the ROW under international trade. At any price, p, the imports of the US, QM. is the excess demand for steel given by the difference between the quantity demanded and the quantity supplied domestically in the US: QM = Q% - Qi. Similarly, the exports of the ROw, QF, is the excess supply of steel given by the difference between how much they produce and how much they demand: QE = Qk - Qg. (b) Find the consumer and producer surplus in the US at the price p". consumer surplus $ million producer surplus million (c) The US government imposes a tax of $12 per unit on the ROw's exports. Find the new world equilibrium price, p**, and new world equilibrium…arrow_forwardGreece and Finland produce and consume two goods, timber (T) and dairy product (D). Labor is the sole factor of production in the two countries. Greece is endowed with Lº = 30,000 labor hours (1. hrs) and Finland is endowed with L =15,000 labor hours (I. hrs). In Greece it takes one (1) 1. hr to produce a ton of good (T), and one fourth (1/4) of a 1. hr to produce a ton of good (D). In Finland, labor productivity in good (T) is twice as high as labor productivity in good (T) in Greece, and labor productivity in good (D) is twenty-five percent (25%) lower relative to labor productivity in good (D) in Greece. Consumer preferences in the two countries are rigid in the sense that whatever the relative prices of the two goods are, residents in Greece always consume three-fourths (3/4) of the country's production, and residents in Finland consume two-thirds (2/3) of its production. a. What is the opportunity cost of the two goods in the two countries? b. Derive the algebraic expression for…arrow_forwardThe intra-industry trade index in television trade for Denmark is 0.92. What conclusion can we draw from this? Group of answer choices - Denmark has a slight comparative advantage in television production because that activity is skill and capital intensive. - Denmark has a strong absolute advantage in TV production thanks to its skilled workers. Televisions are highly differentiated and knowledge intensive products, where mainly increasing returns drives trade. - Denmark outsources important parts of its TV value chain. Firms move down their learning curves.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education