Question

Assume production takes place under constant opportunity costs. Draw two sets of axes, one for Nation...

Assume production takes place under constant opportunity costs. Draw two sets of axes, one for Nation 1 and the other for Nation 2. Draw two identical PPS’s, one for each country. Determine the comparative advantage for each country (nation I and nation II) if taste and preferences are different (i.e., each country has a different set of taste and preferences. Label you graph carefully.

Homework Answers

Answer #1

Below are two identical PPFs for Nation 1 and Nation 2, where Nation 1 has comparative advantage in production of good Y and Nation 2 has comparative advantage in production of good X. This is found by the opportunity cost of producing X which is 2 units of Y in Nation 1 and 0.5 units of Y in Nation 2. Opportunity costs are constant throughout so that PPFs are straight lines. Initial production and consumption bundles are shown by A and B in Nation I and Nation II respectively.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
he table below gives the production alternatives of two nations that are producing tractors and televisions,...
he table below gives the production alternatives of two nations that are producing tractors and televisions, using equal amounts of resources. Tractors Televisons Ritzville 2 8 Clubtown 4 12 Calculate the opportunity cost of producing each of the following: (i) One tractor in Ritzville. (ii) One television in Clubtown. (b) Identify which nation has the comparative advantage in each of the following: (i) Tractor production (ii) Television production (c) Now assume that the productivity of Clubtown’s workers triples for each...
Instructions Students have to create two hypothetical economies with their respective Production Possibilities Frontier (PPF). Parameters:...
Instructions Students have to create two hypothetical economies with their respective Production Possibilities Frontier (PPF). Parameters: One country should be a bigger economy in both industries. Assume constant opportunity costs along each country’s PPF. Thus, there are 5 tasks to complete this assignment: 1. Create a PPF for each hypothetical economy using 5 output combinations for each PPF 2. Graph the PPFs for the two hypothetical economies from a Production Possibilities Frontier schedule 3. Calculate the opportunity costs of producing...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries...
Consider the following model of trade between Home and Foreign. Assume throughout that those two countries are the only two countries in the world, at least for purposes of trade. There are two goods: Corn and Radio. Consumers always spend one-third of their income on Corn and the remainder on Radios. The only factor of production is labour. Each home country worker can produce 2 units of Corn or 3 units of Radios per unit of time, while each foreign...
In the country of Utopia, individuals live two periods (period 0 and period 1) and must...
In the country of Utopia, individuals live two periods (period 0 and period 1) and must decide between two alternative income paths. - “No College”: work full time in both periods, and receive an income of 200 in both periods (Y0,nc = Y1,nc = 200). One can save any amount at interest rate r = 0, but cannot borrow at all (i.e., the interest rate for borrowing is effectively infinite). - “College”: In period 0, go to college, work part-time...
11.) England and Scotland can both produce scones and sweaters. Suppose that an English worker can...
11.) England and Scotland can both produce scones and sweaters. Suppose that an English worker can produce 50 scones per hour or 1 sweater per hour. Suppose that a Scottish worker can produce 40 scones per hour or 2 sweaters per hour. (Draw a diagram of the two production possibilities frontiers in the space below if that would help you to answer the following questions.) a.) Which country has a lower opportunity cost in producing sweaters? (England/Scotland) (2 points) b.)...
In an experiment, a group of students will determine the dielectric constant of paper. They have...
In an experiment, a group of students will determine the dielectric constant of paper. They have the following materials available, as well as other materials traditionally available in a high school physics lab. _____ Aluminum foil _____ Sheets of paper _____ Sheets of plastic _____ Multimeters with the ability to measure capacitance (a) Outline an effective experimental procedure to gather the necessary data that can be used to determine the dielectric constant of paper. Place a check mark next to...
In economics, the term “scarcity”meansthere .
In economics, the term “scarcity”meansthere                    .is a shortage of the factors ofproductionis equilibrium in themarketare unlimited wants and only limitedresourcesare limited wants and unlimitedresourcesA country has an absolute advantage in producing cars ifthat country                    .has a lower opportunity cost of producing cars than any othercountrycan produce more cars in a given amount of time than any othercountryhas a higher opportunity cost of producing cars than any othercountrycharges the highest price forcarsDuring bad economic times, many people lose their jobs. How would that...
1. What is an ISP (Integrated Service Provider) for supply chains? (1 point) A. A consultant...
1. What is an ISP (Integrated Service Provider) for supply chains? (1 point) A. A consultant agency which integrates the supply chain for companies B. A 2 PL or a 3PL, but not a 4PL C. A company supplying transportation and warehousing services D. A logistics service company specialized in suppling VAS (value added services) 2. What characterizes a 4 PL? (1 point) A. They are non-asset based and provides integrated services primarily supplied by asset based providers, for example...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most...
      MK Restaurant: Branding of Thai-Style Hotpot The restaurant industry is one of the most competitive in Thailand. With a large number of players ranging from restaurants in five-star hotels, global fast-food chains to small stalls along the streets and everything in between, the Thais are spoiled for choice. In addition, as the world becomes globalized, consumers are familiar with international dishes and would not hesitate to try new offerings from the other side of the globe. As a...
As you saw from the lab PowerPoint slides last week, you will be doing a research...
As you saw from the lab PowerPoint slides last week, you will be doing a research study looking at ‘Aggression Priming” for your first paper. For this week’s discussion, I want you to discuss with your group what you think this study is about. What is the hypothesis? What theory does it come from? What do you predict will happen (do you expect something different than the hypothesis in the researcher instructions? If so, what and why?)? Do you think...