Question

Suppose that there are only two goods produced in Italy: olive oil (O) and sports cars...

Suppose that there are only two goods produced in Italy: olive oil (O) and sports cars (S). Production of olive oil requires land (T) and labor (L), while production of sports cars requires capital (K) and labor (L). Use this setup to answer question 1 - 7.

1. Land is a specific factor of production of (olive oil / sports cars / neither / No answer text provided)

2.  If as a result of free trade, price of sports cars falls while the price of olive oil stays constant, then Italy is exporting (olive oil / sports cars / both / niether)

3.  If as a result of free trade, price of sports cars falls while the price of olive oil stays constant, Italy will produce (only olive oil / only sports cars / both olive oil and sports cars / No answer text provided)

4. If as a result of free trade, price of sports cars falls while the price of olive oil stays constant, capitalists in Italy will be (better off / worse off / effect is ambiguous / No answer text provided)

5. If as a result of free trade, price of sports cars falls while the price of olive oil stays constant, workers in Italy will be (better off / worse off / effect is ambiguous / No answer text provided)

6. The equilibrium free trade relative price of sports cars with respect to olive oil is determined by which of the following:

- The point where Italy's PPF is tangent to its highest indifference curve.

- The point where the demand for Italian sports cars equals supply.

- The point where the relative price line is tangent to Italy's PPF.

- The point where world relative demand equals relative supply.

7. If as a result of free trade, price of sports cars falls while the price of olive oil stays constant, Italy gains from trade if

- everyone in Italy is better off compared to autarky.

- total welfare increases.

- everyone's purchases power increases.

- No answer text provided.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012, Iran produced about 4.1 million barrels of oil per day and Iraq produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world).  Suppose that Iran and Iraq both produce barrels of oil and bottles of olive...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012, Iran produced about 4.1 million barrels of oil per day and Iraq produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world).  Suppose that Iran and Iraq both produce barrels of oil and bottles of olive...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012, Iran produced about 4.1 million barrels of oil per day and Iraq produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world).  Suppose that Iran and Iraq both produce barrels of oil and bottles of olive...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates...
Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012, Iran produced about 4.1 million barrels of oil per day and Iraq produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world).  Suppose that Iran and Iraq both produce barrels of oil and bottles of olive...
3. Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC...
3. Consider Iran and Iraq and their production of oil and olive oil. Relatively recent OPEC estimates indicate that in July 2012, Iran produced about 4.1 million barrels of oil per day and Iraq produced about 3.2 million barrels of oil per day, making them the second- and third-largest oil producers in OPEC, behind Saudi Arabia (and the 4th and 7th largest oil producing countries in the world). Suppose that Iran and Iraq both produce barrels of oil and bottles...
Suppose two countries, Farmland and Techland, use only capital and labor to produce two goods, Grain...
Suppose two countries, Farmland and Techland, use only capital and labor to produce two goods, Grain (G) and Cars (C). Farmland has 2,050 units of capital and 916 units of labor, and Techland has 816 units of capital and 270 units of labor. In Techland, there are 366 units of capital and 135 units of labor employed in the Grain industry. In Farmland, there are 926 units of capital and 618 units of labor employed in the Grain industry. A.    ...
Amy has income of $M and consumes only two goods: composite good y with price $1...
Amy has income of $M and consumes only two goods: composite good y with price $1 and chocolate (good x) that costs $px per unit. Her util- ity function is U(x,y) = 2xy; and marginal utilities of composite good y and chocolate are: MUy = 2x and MUx = 2y. (a) State Amy’s optimization problem. What is the objective function? What is a constraint? (b) Draw the Amy’s budget constraint. Place chocolate on the horizontal axis, and ”expenditure all other...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s wants and needs for goods and services seem to be unlimited. (2 points) 2.) (1 point) Adam Smith’s “invisible hand” refers to a.) the subtle and often hidden methods that businesses use to profit at consumers’ expense. b.) the ability of free markets to reach desirable outcomes, despite the self-interest of market participants. c.) the ability of government regulations to benefit consumers, even if...
19. The method we used to determine whether a country/society was better or worse off after...
19. The method we used to determine whether a country/society was better or worse off after a change in policy or a movement towards free trade (from autarky) was a. by calculating the net effects b. by examining the total surplus c. by considering the deadweight loss triangles d. all of the above e. none of the above (not including d) ------------------------------------------------------------------------------------------------------------------------- 20. Consider the small Home country doing tariffs under PC. Which of the following statements is true? a....
1. What are the requirements for successful price discrimination? Does this type of dry cleaning qualify?...
1. What are the requirements for successful price discrimination? Does this type of dry cleaning qualify? 2. What are other examples of price discrimination? 3. The effectiveness of price discrimination is a different question than whether businesses should be able to discriminate by price. Is this an issue that deserves regulation, or is it best left to the market? Why Women Pay More From dry cleaning to haircuts, women often pay more than men due to gender pricing. Find out...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT