ECN 212 Study Guide - Midterm Guide: Gross Domestic Product, Demand Curve, Price Support

104 views1 pages

mauvecattle663

25 Nov 2018

School

Department

Course

Professor

For unlimited access to Study Guides, a Grade+ subscription is required.

Document Summary

Econ 1120 wissink hand written problem set #1: consider a small community which consists of three producers: jay, kay and dee. The following table shows how many hours it takes each person to produce one unit of each output. Who has the comparative advantage on cloth production? (b) assume jay, kay and dee are all completely self-sufficient. If dee wants to consume 8 yards of cloth, how much food, at most, can dee consume? (c) suppose kay is still self-sufficient, but dee and jay decide to produce food and cloth cooperatively. Indicate who specializes in the production of what good on each line segment of the graph. Hours needed to make each pound of food each yard of cloth. 3: let"s model the market for cigarettes. Suppose the market demand curve for cigarettes (in billions of packs) is.

Related Questions

You are given the information shown in the table about production relationship in Pugelovia and Pomerania below:

	Labor Hours Per Unit of Rice	Labor Hours Per Unit of Cloth
Pugelovia	75	100
Pomerania	50	50

You make several Ricardian assumptions: these are the only two commodities, the productivity of labor is constant for each product no matter how much is produced, and competition prevails in all markets.

1)Compute the productivity of each country for each product. Which country has an absolute advantage at producing rice? Which country has an absolute advantage at producing cloth?

2)Compute the relative prices of each product in each country without trade. Which country has a comparative advantage at producing rice? Which country has a comparative advantage at producing cloth?

3)According to the theory of comparative advantage, which country would export rice? Which country would export cloth?

4)If Pugelovia and Pomerania are allowed to trade, what would be the limits for the relative price of rice? What would be the limit for the relative price of cloth?

5)Assume that no trade is allowed between the countries and that Pugelovia has 10,000 hours of labor available to use. If people want to consume rice and cloth in equal amounts, how much rice and how much cloth would Pugelovia produce?

6)Plot the production possibility curve for Pugelovia if it has 10,000 hours of labor available. Label the economyâs production of rice and cloth from part e point A on the PPC.

cerisegiraffe33

Suppose two people, Michelle and James each live alone in anisolated region. Both have the same resources available, and thegrow potatoes, and raise chickens. If Michelle devotes all herresources to growing potatoes, she can raise 200 pounds of potatoesa year. If she devotes all her resources to raising chickens, shecan raise 50 chickens per year. (If she apportions some resourcesto each, then she can produce any linear combination of chickensand potatoes that lies between those extreme points. If Jamesdevotes all his resources to growing potatoes, he can raise 80pounds of potatoes per year. If he devotes all his resourcesraising chickens, he can raise 40 chickens a year. ( If heapportions some resources to each, the he can produce any linearcombination of chickens and potatoes that lies between thoseextreme points).

1. What is Michelle's opportunity cost of producing potatoes?

2. What is Michelle's opportunity cost of producing chickens?

3. What is James' opportunity cost of producing potatoes?

4. What is James' opportunity cost of producing chickens?

5. Which person has an absolute advantage in whichactivities?

6.Which person has comparative advantage in potatoes?

7. Which person has comparative advantage in chickens?

8. Suppose that they are thinking of each specializing completelyin the area in which they have a comparative advantage, and then ata rate of 2.5 pounds of potatoes for 1 chicken,would they each bebetter off?

Explain

9. How would you extend the above narrative to businesses, societyas a whole or nations? Explain

lavenderllama915

Use the following information for the next seventeen questions:

Assume that it takes the US 150 units of labor to produce a table and 30 units of labor to produce a chair.

Assume it takes the Netherlands 100 units of labor to produce a table and 10 units of labor to produce a chair.

Assume that each country has 4800 units of labor and before trade, each country splits their labor evenly between chair and table production.

Assume that when the countries decide to trade, the country specializing in table production specializes in table production only.

Assume that when the countries decide to trade, the country that specializes in chair production uses 1000 units of labor for table production and the rest (3800 units) for chair production.

Assume that when the countries trade, there are a total of 15 tables traded at a rate of 7 chairs per table.

1. What is the opportunity cost for the US for the production of one chair in terms of number of tables?

Hint: enter a number only, do not write tables after the number and if the number is a fraction, enter it as a decimal

Example: if the answer is 8 tables, enter 8 or if the answer is 1/4 tables, enter 0.25.

2. What is the opportunity cost for the Netherlands for the production of one table in terms of number of chairs?

Hint: enter a number only, do not write chairs after the number and if the number is a fraction, enter it as a decimal

Example: if the answer is 8 chairs, enter 8 or if the answer is 1/4 chairs, enter 0.25.

3. Who has the comparative advantage in table production?

4. Who has the comparative advantage in chair production?

ECN 212 Study Guide - Midterm Guide: Gross Domestic Product, Demand Curve, Price Support

Document Summary

Get access

Related Documents

ECO102H1 Lecture Notes - The Intercept, Absolute Advantage, Comparative Advantage

Economics 1021A/B Lecture Notes - Asteroid Family, Canada–United States Softwood Lumber Dispute, Complaint System

PUBPOL 201 Lecture Notes - Lecture 2: Portuguese Wine, Absolute Advantage, Comparative Advantage

Related Questions