Question

PLEASE show how you arrived at your answers. Thank you. ……………………….Inputs per unit of strawberry output…………Inputs...

PLEASE show how you arrived at your answers. Thank you.

……………………….Inputs per unit of strawberry output…………Inputs per unit of curtain output

Birdy Island                                         60 ..............................................................80

Ducky Island                                       40.............................................................. 40

1. Which country has absolute advantage in which good?

                A.            Birdy has an absolute advantage in producing both strawberry and curtain.

                B.            Ducky has an absolute advantage in producing both strawberry and curtain.

                C.            Birdy has an absolute advantage in producing strawberry whereas Ducky has an absolute advantage in producing curtain.

                D.            Birdy has an absolute advantage in producing curtain whereas Ducky has an absolute advantage in producing strawberry.

2. What would be the trade pattern?

                A.            Birdy imports curtain and exports strawberry whereas Ducky imports strawberry and exports curtain.

                B.            Birdy imports strawberry and exports curtain whereas Ducky imports strawberry and exports curtain.

                C.            Birdy imports strawberry and exports curtain whereas Ducky imports curtain and exports strawberry.

                D.            Birdy imports curtain and exports strawberry whereas Ducky imports curtain and exports strawberry.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

a) An absolute advantage is a situation when one trading partner can produce both the goods at a relatively lower cost. Here, Ducky island can produce both the strawberry and curtain using less input compared to Birdy Island. the answer is "B", Ducky has an absolute advantage in the production of both the goods.

b) Trade pattern is based on comparative advantage. A nation having a less absolute disadvantage in any product has a comparative advantage in the production of that goods. Birdy has a less absolute disadvantage in the production of Strawberry. So, they will export strawberry.

The answer is "A", Birdy will import curtains and export strawberry whereas Ducky imports strawberry and exports curtain.

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
Inputs per unit of strawberry output Inputs per unit of curtain output Birdy Island 60 80...
Inputs per unit of strawberry output Inputs per unit of curtain output Birdy Island 60 80 Ducky Island 40 40 If the two countries open up to free trade, what would be the possible international price level? 0.50 C/S 0.90 S/C 0.90 C/S 0.50 S/C
PLEASE show how you arrived at your answers. Thank you. ………………………..Labor Hours Per Kilogram Ice Cream………...
PLEASE show how you arrived at your answers. Thank you. ………………………..Labor Hours Per Kilogram Ice Cream……… Labor Hours Per Kilogram Milk Schenectady                                      3                                                                              2 Poughkeepsie                                   5                                                                              2 1.            Which of the following is true?                                 A.            Schenectady has absolute advantage in milk production.                                 B.            Schenectady has absolute advantage in ice-cream production.                                 C.            Poughkeepsie has absolute advantage in milk production.                                 D.            Poughkeepsie has absolute advantage in ice-cream production. 2.            What is the relative price of ice-cream in...
Suppose that, with a given unit of labour, India can produce 40 basketball hoops or 60...
Suppose that, with a given unit of labour, India can produce 40 basketball hoops or 60 basketballs and Nepal can produce 10 basketball hoops or 40 basketballs. This scenario is illustrated below: Output Hoops (H) Balls (B) India 40 60 Nepal 10 40 Explain absolute and comparative advantage for India and Nepal? If each country has 1000 person-days of labour, construct each country’s production-possibility curves. c.If Nepal wants to consume equal amounts of both goods (as many units of hoops...
1.    Costs are in hours/unit output. PLEASE SHOW ALL WORK/HOW YOU GOT YOUR ANSWERS. Table 1...
1.    Costs are in hours/unit output. PLEASE SHOW ALL WORK/HOW YOU GOT YOUR ANSWERS. Table 1 Honey Tea INDIA 1 1/3 WALES 1/6 1/4 a.    Find the opportunity cost of producing Honey and Tea.         INDIA    Honey__________ Tea___________                               WALES Honey___________       Tea___________ b.     In which good does INDIA and WALES have a comparative advantage?                                 INDIA ____________________                                  WALES ____________________ c.    How many hours will INDIA and WALES gain if 6H are exchanged for 6T?                                 INDIA ____________________                  WALES...
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce at...
England and Scotland both produce scones and sweaters. Suppose that an English worker can produce at most 40 scones per day or at most 2 sweaters per day. Suppose that a Scottish worker can produce at most 20 scones per day or at most 4 sweaters per day. a. Which country has the absolute advantage in the production of each good? b. Find the opportunity cost of producing one sweater in terms of scones for each country. In other words,...
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country...
Consider a Ricardian environment. Two countries (A and B) make two goods (X and Y). Country A has 60 units of labor and country B has 120 units of labor. The unit labor requirements are as follows: X Y Country A 1 2 Country B 2 3 a. Draw the PPF for each country b. Calculate the autarky prices for each country (Px/Py) c. Which country has an absolute advantage in good X? Good Y? Which has a comparative advantage...
Brazil and Chile can produce cloth and wheat. In Chile, the labor requirement for a yard...
Brazil and Chile can produce cloth and wheat. In Chile, the labor requirement for a yard of cloth is 6 hours while the requirement for a bushel of wheat is 9 hours. In Brazil, the requirement for a yard of cloth is 6 hours while that for a bushel of wheat is 8 hours. a). Which country has absolute advantage in wheat? In cloth? b). What is the opportunity cost of wheat (in terms of units of cloth) in Brazil?...
1. Gains from trade Consider two neighboring island countries called Arcadia and Dolorium. They each have...
1. Gains from trade Consider two neighboring island countries called Arcadia and Dolorium. They each have 4 million labor hours available per month that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. Country Corn Jeans (Bushels per hour of labor) (Pairs per hour of labor) Arcadia 12 24 Dolorium 8 32 Initially, suppose Arcadia uses 1 million...
For EACH of these tables, do the following, assuming that both countries are initially in autarky....
For EACH of these tables, do the following, assuming that both countries are initially in autarky. Note: Show ALL of your work! a. For each good, identify which country has an absolute advantage. b. For each country, calculate the opportunity cost of producing one more unit of cars. c. For each good, identify which country has a comparative advantage. d. EXPLAIN how international economic forces will influence the different businesses in each country when trade is allowed, stating clearly what...
Microeconomics: Comparative Advantage: NOTE: I ONLY NEED THE ANSWER FOR (e) California is very fertile. Farmers...
Microeconomics: Comparative Advantage: NOTE: I ONLY NEED THE ANSWER FOR (e) California is very fertile. Farmers can produce avocados and corn on their land, 6 and 10 units per unit of land respectively. They have 5 units of land. In the Canadian prairies one can also grow avocados and corn, at 1 and 5 units per unit of land. There are 15 units of land. Assume both countries have perfectly competitive markets. Let the utility function of consumers in each...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT