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- “The country that is abundant in a factor exports the good whose production is intensive in thatfactor.” Explain the above statement with the help of a graph.If Country A's opportunity cost for produc 1 pound of cashews is 5 pounds of coffee, and Country B's opportunity cost is 1 pound of coffee, which country has a comparative advantage in cashew production? O the country that can produce the most coffee O the country that can produce the most cashews O Country B O Country AWichita — Farmers in Kansas, the biggest US producerof wheat, are abandoning their crops damaged by severedrought and cold.Some are spraying wheat fields with crop-killingchemicals and claiming insurance payouts in the beliefthat it is not worth harvesting the little grain that thereis, Reuters found on a three-day tour of the state. Othergrowers let cattle graze on the dismal-looking fields.Abandoning fields will reduce the crop of the world’sfifth-largest wheat exporter, with stocks expected to fallto a 16-year low. Large-scale abandonment deals aneconomic blow to farm towns and force wheat buyersto adjust procurement plans by buying the staple grainelsewhere.Nationally, winter-wheat farmers plan to abandon 33%of the acres they planted, the highest percentage sinceWorld War 1, the US department of agriculture said ina May 12 report.Kansas farmers are expected to abandon about 19% ofthe area planted last autumn, up from 10% in 2022 and4% in 2021, according to the report. But farmers,…
- Wichita — Farmers in Kansas, the biggest US producerof wheat, are abandoning their crops damaged by severedrought and cold.Some are spraying wheat fields with crop-killingchemicals and claiming insurance payouts in the beliefthat it is not worth harvesting the little grain that thereis, Reuters found on a three-day tour of the state. Othergrowers let cattle graze on the dismal-looking fields.Abandoning fields will reduce the crop of the world’sfifth-largest wheat exporter, with stocks expected to fallto a 16-year low. Large-scale abandonment deals aneconomic blow to farm towns and force wheat buyersto adjust procurement plans by buying the staple grainelsewhere.Nationally, winter-wheat farmers plan to abandon 33%of the acres they planted, the highest percentage sinceWorld War 1, the US department of agriculture said ina May 12 report.Kansas farmers are expected to abandon about 19% ofthe area planted last autumn, up from 10% in 2022 and4% in 2021, according to the report. But farmers,…What is Comparative Advantage and how is it determined? Explain this concept in words.What is comparative advantage?
- X Y Producer A 20 20 Producer B 15 15 the table above shows the maximum number of goods X and Y producers A and B can produce in a day. Which of the following statements is TRUE? 1. Producer A has a comparative advantage in producing X 2. Producer A has a cmparative advantage in producing Y. 3. Producer B has the absolute advantage in producing X and Y 4. No producer has comparative advantage in either X and Y> A. 1 and 2 Only B. 3 and 4 only C. Only 4 D. 1, 2, and 3 onlyA worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice. a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good? b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage c. If there was trade, which country would specialize in the production of rice? d. At what price of computers would the countries agree to trade?Suppose an economyuses two resorces (labor and capital) to produce two goods (wheat and cloth). Captial is relativley more useful in prducing cloth, and labor ir relativley more useful in prducing wheat. If the supply of cpatial falls by 10% and the suppy of labor increases by 10%, how will the PPF for wheat and cloth change?
- ples and no change in ce cream Od.+1 pie and +2 ice cream QUESTION 2 Pie Tim Pies Deve 10 The graphs above de loe Cream loe Cream make in a given weekend. Use this to answer the questions that follow. Which of the following is true? O a. Tim has the absolute advantage at both ice cream and pies and Dave has the comparative advantage at ice cream Ob. Dave has the comparative advantage at pies and Tim has the comparative advantage at ice cream OC. Tim has the comparative advantage at ice cream and pies Od. Dave has the absolute and comparative advantage at ice cream and Tim has the absolute and comparative advantage at pies QUESTION 3Country A Country B No. of pencils 100 50 produced pounds of paper produced 150 150 a)Country A and Country B can both produce paper and pencils, according to the table above and using the same amount of time and resources. Which country has the absolute advantage in producing each good? choices Country A has absolute advantage in pencils, but neither country has absolute advantage in paper Country A has absolute advantage in both Country B has absolute advantage in both Country B has absolute advantage in paper, but Country A has absolute advantage in pencils Neither country has absolute advantage in either goodWhat is absolute advantage? What is comparative advantage?