Question

QUESTION 1

1. Consider the following maximum production quantities. Which country has the absolute advantage in fish?

   	Fish	Ore
   Fire Nation	600	1200
   Air Nomads	70	50
   Water Tribe	800	200
   Earth Kingdom	1000	1500

   		Water Tribe
   		Fire Nation
   		Air Nomads
   		Earth Kingdom

11 points   

QUESTION 2

1. Consider the following maximum production quantities. Which country has the comparative advantage in fish?

   	Fish	Ore
   Fire Nation	600	1200
   Air Nomads	70	50
   Water Tribe	800	200
   Earth Kingdom	1000	1500

   		Fire Nation
   		Earth Kingdom
   		Air Nomads
   		Water Tribe

12 points   

QUESTION 3

1. Consider the following maximum production quantities. Which country has the comparative advantage in ore?

   	Fish	Ore
   Fire Nation	600	1200
   Air Nomads	70	50
   Water Tribe	800	200
   Earth Kingdom	1000	1500

   		Fire Nation
   		Air Nomads
   		Water Tribe
   		Earth Kingdom

12 points   

QUESTION 4

1. Consider a PPF diagram for the U.S. like the one below. Suppose A represents "Legal Services" and B represents " Care for the Elderly ." What would happen if new immigration laws made it harder for workers with medical training to move to the U.S. to work?

15 points   

QUESTION 5

1. Consider a PPF diagram for Dallas, Texas like the one below. Suppose A represents "Capital Goods" and B represents "Consumption Goods." What happened after Hurricane Harvey swept through the city, destroying billions of dollars in property and causing dozens of people to lose their life?

15 points   

QUESTION 6

1. Consider a PPF diagram for Maryland like the one below. Suppose A represents "Coal" and B represents "All Other Goods." What would happen if new mining technology drastically reduced the chance of a coal mine collapsing?

15 points   

QUESTION 7

1. Which of the following is a true statement? (Check all that apply.)

   		A technological improvement isolated to one sector can indirectly result in more production in all other sectors.
   		All points on the PPF are productively efficient.
   		It is possible for a point to be allocatively efficient without being productively efficient.
   		PPFs slope down for the same reason that the demand curve slopes down.

Answer 1

Question 1

Earth Kingdom

Absolute advantage exists when an individual or country is able to produce more of a commodity for a period of time than other individual or country with equal posession of resources. In the question it is given that Fire Nation can produce 600 Fish and 1200 Ore within a certain time period and certain amount of resource posession. At the same time Air Nomads can produce 70 Fish and 50 Ore, Water Tribe can produce 800 Fish and 200 Ore, and Earth Kingdom can produce 1000 Fish and 1500 Ore with the same time and resources. Therefore when all resources of Earth Kingdom is employed in the production of Fish they can produce 1000 Fish which is greater than any other country. Therefore Earth Kingdome is having and absolute advantage in Fish.