Country X has 100 units of labour and country Y has 200 units of labour. Bothcountries produce computers and televisions. The unit labour requirements aregiven in the table below:ComputersTelevisionsCountry X50Country Y100Assume that free trade exists and that the relative price is such that bothcountries specialize completely in the industry in which they have a comparativeadvantage (neither country produces both goods). The supply of computersrelative to televisions will beSelect one:a. 0.02 (or 1/50)O b. 0.013 (or 1/75)c. 0.01 (or 1/100)d. impossible to determine without knowing the relative price of computersin terms of televisions

The cost which depicts the cost of the next best alternative that is being foregone is known as the…

Answered: Country X has 100 units of labour and…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter28: International Trade

Section: Chapter Questions

Problem 9P

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The countries of Nickeltown and Lykesville each produce two goods: Ovens and Dishwashers. The table below lists the production for each good, for each country per year when each country uses half of their resources to produce each good. Country Production of Ovens Production of Dishwashers Nickeltown 105 Lykesville 147 What is the opportunity cost of producing 1 Ovens in Nickeltown Dishwashers 70 42 What is the opportunity cost of producing 1 Ovens in Lykesville Dishwashers ONickeltown OLykesville ONot enough information Which country has a comparative advantage in producing Ovens?
QUESTION 12 Mexico is an importer of rice. The world price of a kilo of rice is $10. Mexico imposes a $2-per-kilo tariff on rice. Mexico is a price-taker in the rice market. As a result of the tariff, Mexican consumers of rice become worse off and Mexican producers of rice become worse off. Mexican consumers of rice become worse off and Mexican producers of rice become better off. Mexican consumers of rice become better off and Mexican producers of rice become worse off. Mexican consumers of rice become better off and Mexican producers of rice become better off.
Suppose there are two countries Peru and Japan that produces 7,523 units ofFood or 17,853 units of Fuel using a labour force of 8000. Japan can produce 5,733 units of Food or 24,156 units of Fuel using a labour force of 5,000. d) Which country has the comparative advantage in food? In fuel? Explain. e) Which good(s) should each country specialized in?
What is trade theory .Explain with two graphical examples.
The following production possibilities schedule shows the quantities of soybeans and oil that can be produced in Canada and Mexico with one unit of equivalent resources Of (barrels) 12 6 Canada Mexico Mexico would not gain by producing and exporting oil and importing soybeans unless it received O A more than 4 17 bushels of soybeans per barrel of of OB. 2 bushels of soybeans per barrel of o OC any quantity of soybeans OD. more than 5 42 bushels of soybeans per barrel of ol OE more than 0.5 barrel of ol Soybeans (bushels) 65 25
We are given the following labour per output ratios for the US and Mexico:Chemicals RadiosUS 1 3Mexico 10 5This should be read as; in order to produce 1 unit of the good, for example chemicals, we need 1unit of labour in the US and 10 units of labour in Mexico What is the relative price of chemicals in terms of radios in the US? In Mexico?.Explain your answer
The figure shows trade in auto parts between the United States, Mexico, and Asia. Had the United States and Mexico failed to join the United States-Mexico-Canada (USMCA) free trade agreement, Mexico's supply curve would have been SMex. a. Shift Mexico's supply curve to show the impact of USMCA on this market. 20 19 18 17 S. Меx S' Mex 16 15 14 13 12 A 11 8 10 S. +t Asia S Asia 8 4 3 2 M US 1 20 40 60 80 100 120 140 160 180 200 Import Quantity b. Who supplies auto parts to the United States? Does the United States import a larger quantity of auto parts after USMCA; that is, does trade creation occur? After the USMCA was established, Mexico and Asia supply - auto parts to the United States. The United States imports the same amount of - auto parts after USMCA. Trade creation does not occur - c. What is the change in government revenue compared with before USMCA? -30 Change in government revenue: $ Price ($)
See the table here below: Labor Input: Tables and Chairs Production Country X Country Y Chair Table 6 20 10 Determine which country has comparative advantage in the production of chairs and tables, respectively? Country Y, Country X. Both have the lowest opportunity cost in each of the items. Country X, Country Y Country X, Country X Country Y, Country Y
The following goods and services are commonly traded in Australia. For each good or service explain whether the trade in that particular commodidity is explained by external or internal economies of scale: 1: A musician on a busy street in Sydney 2: All cars are either imported or assembled in Australia 3: Gold mine in South Australia
Under autarky, the equilibrium quantity of chairs in India is 101022 per year. Once free trade is introduced with the world, quantity of chairs produced in India is 174042 per year and quantity of chairs purchased by Indian citizens is 83141 per year. What is the volume of exports of chair from India under free trade?
home cheese alc=1hr/kg wine alw=2hrs/gallon foreign cheese alc*=6hrs/kg wine alw*=3hrs/gallon Calculate the Home country's opportunity cost of producing cheese. In which product does the Home (Foreign* ) country has an absolute advantage? Show in which product does the Home (Foreign* ) country has comparative advantage? Calculate the relative supply (RS) With trade, what is the equilibrium range that the relative price of cheese to wine will settle? Supposing that the intersection of RS and RD occurs at PC /PW = 1, what is the implication?
Suppose the demand and the supply for lumber (harvested wood processed in a sawmill) used for construction in Australia are given byQD =100 – 2PQS = 1/2PAssume also that the market is perfectly competitive.Suppose the lumber market described was closed to the rest of the world. Now it opens to trade and the world price of lumber is 20. Compute the equilibrium price, quantity supplied by domestic producers, and quantity demanded by domestic consumers.2.Use a demand and supply graph to show how consumer surplus, producer surplus, and total surplus change with international trade.3. Now suppose that Country A is a major exporter of lumber to Australia and in an effort to impose sanctions on Country A, Australia imposes a tariff of t=10 on all lumber imported into Australia. Use a graph of supply and demand to show how the tariff changes consumer, producer and total surplus.4. Calculate the equilibrium price, quantity produced and demanded domestically, tariff revenue, and deadweight loss.

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