Question 4 a. What are the gains to be derived from free trade? b. Illustrate, with the use of diagrams, and discuss the gains from free trade? c. Clearly explain and illustrate the gains from exchange and the gains from specialization?
Q: The following graph shows the supply of space on a commuter highway and the demand for highway space…
A: Supply refers to the quantity of a product or service that is available in the market at a given…
Q: What are the three lags that can affect the appropriate timing for effective fiscal policy changes?…
A: The slack time definition is the time taken prior to carrying out a policy toward impacting an…
Q: 15. The assumption that preferences are complete requires the consumer: (a) To rank any two bundles…
A: Consumer theory is an economic branch that focuses on how consumers make choices to maximize their…
Q: ngs plan req you paymer 250 each at the every for a year. The bank will then make six equal monthly…
A: Given Nominal interest rate =4% per annum compounded monthly. The monthly payment for saving plan…
Q: Question 6 Find the correct numerical value for the following factor from the compound interest…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: 12. If indifference curves cross, then: (a) the assumption of a diminishing marginal rate of…
A: An indifference curve represents the various combinations of two goods that a consumer considers…
Q: Suppose output is $90 billion, government purchases are $20 billion, desired consumption is $50…
A: GDP is the gross domestic product. The formula of output is given as the sum of government…
Q: The world's human population is currently at 8 billion people, and the population growth rate is at…
A: Population growth rate is the nation, area, or geographical area's yearly average rate of change in…
Q: ary system - Work It Out: Question 1 In the nation of Orcam, people hold $4000 of currency and…
A: Money Supply The entire amount of cash as well as other liquid assets present in an economy on the…
Q: At a price of $10 quantity demanded is 30 units while at a price of $12, quantity demanded is 24…
A: Price elasticity of demand is the responsiveness of quantity demanded due to change in price.
Q: Aggregate demand, aggregate supply, and the Phillips curve In the year 2027, aggregate demand and…
A: Introduction A graphic presentation of the economic link between the unemployment rate and inflation…
Q: 23. Suppose that there are two goods in an economy and that all prices double. At the same time, the…
A: A budget line is a graphical representation of the limit of what a consumer can afford to buy with a…
Q: Two processes can be used for producing a polymer that reduces friction loss in engines. Process T…
A: Given that: Process T Process W First cost $620,000 $1,120,000 Operating cost $64,000 per…
Q: _____ is when everyone in a country is covered by insurance that is run and administered by the…
A: An insurance contract is a legal arrangement between a person or organization (the policyholder) and…
Q: A small open economy with free capital mobility experiences a temporary adverse supply shock and the…
A: "Capital mobility" basically refers to the ease with which financial resources, such as money or…
Q: Felice lives and works for two periods. In the first period, she earns 520 coconuts and in the…
A: In this case, we have to know the term budget constraint and indifference curve. Here we have to…
Q: CHECK ALL THAT APPLY The fact that the internal rate of retum (IRR) of a career medicine in the…
A: An investment's profitability can be predicted using the financial indicator known as the internal…
Q: 1. A. For each of the following, state whether or not it is included in GDP. If it is, state the…
A: Gross Domestic Product (GDP) is a measure of the total value of goods and services produced within a…
Q: Price elasticity measures the responsiveness of the quantity demanded or supplied to a good to a…
A: Economics is the study of shortage and how it impacts a variety of complex social issues, including…
Q: Assessment 2: Interpret Me! Direction: Interpret the picture below. Based your answer from our topic…
A: Our daily lives are significantly influenced by economics. It helps us understand how individuals,…
Q: Exhibit 2-2 Production possibilities curve Corn (millions of bushels) 10 8 6 4 2 0 1 1 T 1 1 1 1--1…
A: Opportunity cost is the cost of giving up the next best option in order to pursue a certain course…
Q: There was a disruption in production and shipment of fertilizer when Russia invaded Ukraine in March…
A: There are many factors that can affect the demand and supply of a product or service, which can…
Q: You go on vacation for 14 days to an island in the middle of the ocean that is known for selling…
A: Supply refers to the amount of a good or service that is available in the market, while demand…
Q: Using the point elasticity of demand formula (e = P/Q * 1/Slope), calculate the price elasticity of…
A: A demand curve depicts the inverse relationship between price and quantity demanded, keeping other…
Q: When expected future marginal product of capital increases in a small open economy with free capital…
A: Introduction The extra production a business experiences after adding one unit of capital is known…
Q: a. Let's assume that the base year was 2015, so that real GDP in 2015 equals nominal GDP in 2015. If…
A: Gross domestic product measures the market value of final goods and services produced by a nation…
Q: What amount of money deposited 25 years ago at 10% interest would now provide a perpetual payment of…
A: Given, Perpetual payment (A) = 5,000 Interest(I) = 10% = 0.10 n = 25 years
Q: 4) The demand for labor by an industry is given by the curve L = 1200 - 10w, where L is the labor…
A: ***Since the student has posted multiple questions, hence, the expert is required to solve only the…
Q: How long will it take P500.00 to be four times its value if invested at the rate of 10% compounded…
A: In this problem, we'll calculate how long it will take for P500.00 to P2000 in value if invested at…
Q: Required information The Briggs and Stratton Commercial Division designs and manufacturers small…
A: Given that the salvage value of the push system will equate the worth of the both systems o.e. push…
Q: Ambrose has indifference curves with the equation x2 = constant 4x^1/2, where larger constants…
A: Indifference curve An indifference curve is a diagrammatic depiction of a combination of goods that…
Q: When the government places a fixed tax on Hot Air's profit of $50 a month, the profit-maximizing…
A: When government imposes fixed tax of $50, then the total cost at each level of output increases by…
Q: 4A. (i) Derive the equations for the IS and LM curves: IS LM (ii) Illustrate graphically. Be sure to…
A: “Since you have posted multiple questions with multiple sub parts, we will provide the solution only…
Q: Estimates of price elasticity typically range between -0.1 and -.75 with hospital services at the…
A: Inelastic demand refers to the price elasticity od demand where the quantity demanded changes by a…
Q: Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate…
A: Cyclical unemployment refers to unemployment that is caused by cyclical trends in the industry or…
Q: Suppose a perfectly competitive market with 5 firms in the market. Each firm has supply…
A: In perfectly competitive market, there are large number of firms, each selling identical good.
Q: QUESTION 5 Referring to the oil market graphs, In a free market society with no government…
A: Market demand for a commodity can change as a result of a change in consumers income, their tastes…
Q: simultaneously set prices (as in the Bertrand model); and if some firm sets than other firms, then…
A: A market structure body by a solo seller, selling a unique product in the market. In a monopoly…
Q: 19. Refer to Table 1 given below. Suppose that you have a house that you rent out. If you keep the…
A: The benefit of maintaining the lawn must be greater than the opportunity cost of wages you are…
Q: 5. Refer to Figure 1. At any consumption bundle with the quantity of good X exceeding th quantity of…
A: Marginal rate of substitution will be computed between two items placed on an indifference curve,…
Q: book by Randy R. Grant and Stanley L. Brue as reference. 1. Which tenets of neoclassical school…
A: The late 19th and early 20th centuries saw the emergence of the neoclassical school of economics,…
Q: 7. Suppose the consumer buys pizza and soda. The price of pizza is $15 and the price of soda is $3.…
A: Budget line is a graphical representation of all possible combination of two goods, x and y, that…
Q: Suppose that you can schedule a worker for up to 4 hours per day. The total benefit and total cost…
A: Marginal benefit refers to the additional benefit derived by employing one additional hour of labor.…
Q: Utility functions are simply mathematical representations of preferences. (a) True (b) False
A: Utility is defined as the total amount of satisfaction received by an individual by consumping a…
Q: Five deposits are made at the EOYs 2021–2025. The deposit amounts increase by 10% every year. If the…
A: An annuity is a financial product that provides a series of payments at regular intervals, usually…
Q: When there are two large open economies in the world, if desired international borrowing by the…
A: An open economy is an economy that interacts with the rest of the world through international trade…
Q: Suppose the economy is in equilibrium, with real interest rates equal to 4% and National Savings…
A: Introduction In the classical model, the key is that price adjustment brings about equilibrium.…
Q: Scooter's Scooters is a large American manufacturer of electric scooters operating out of Mesa.…
A: Introduction Economies of scale refer to the cost advantages that businesses can realize when…
Q: Part 2: GDP is a measure of our economic well-being, though this measure omits some things that are…
A: Gross domestic product (GDP) measures the money value of all final goods and services produced in an…
Q: Suppose that an insurance company has 100 people in the insurance pool. Suppose further that the…
A: Health insurance is a kind of insurance that covers medical expenses that arise because of an…
Question 4
a. What are the gains to be derived from free trade?
b. Illustrate, with the use of diagrams, and discuss the
c. Clearly explain and illustrate the gains from exchange and the gains from specialization?
Step by step
Solved in 4 steps with 2 images
- a. What are the gains to be derived from free trade? b. Illustrate, with the use of diagrams, and discuss the gains from free trade. c. Clearly explain and illustrate the gains from exchange and the gains from specialization. (rubric attached as picture)Suppose a capital abundant country, such as Canada, enters into free trade with a natural resource rich country, such as India.I. Explain the form of trade, such as, who exports what and imports what, using the concept of comparative advantage in trade theory. Identify each country’s comparative advantage and disadvantage.II. Explain how trade creates winners and losers within each country?Note: You may/may not draw relevant diagrams to answer the above questions.Please answer part c Question 4a. What are the gains to be derived from free trade? b. Illustrate, with the use of diagrams, and discuss the gains from free trade?c. Clearly explain and illustrate the gains from exchange and the gains from specialization?
- Explain the two main categories of gains from trade which are 1. gains from exchange and 2. Gains from specialization. Use appropriate diagrams to explain.Question 1 a) How do the mercantilist’s view on trade differ from those of Adam Smith? b) How did Adam Smith explain his contention that all nations engaged in trade can benefit from trade?6 Question 1: How China became the production center of the world? Explain using Comparative Advantage theory of trade.
- What are the positive effects of international trade? Select one: a.stimulates and facilitates the full use of national capital; b.ensure the full use of the resources available in each country, contributing to market growth; c.it is a tool sometimes used to transfer new ideas and technologies; d.does not contribute to the fight against monopolistic tendencies;All of the following are advantages of free trade except: a. Free trade helps keep interest rates high b. The global market consists of more than 7 billion potential customers c. Global competition helps keep prices low. D.. Increase productivity in areas of comparative advantagesugar, You have been asked to analyze the opportunity costs and comparative advantages to recommend an efficient trading relationship. Consider the production data provided. Prepare a brief report that: 3. Calculate and compare the opportunity costs of producing 1 unit of corn and 1 unit of sugar in each country. Which country has the lower opportunity cost for each good? 2. Determine which good each country has a comparative advantage in producing sugar and which one has a comparative advantage in producing corn. Explain your analysis. 3. Recommend a trading relationship that allows the countries to specialize based on comparative advantage. How would trade Improve economic efficiency? 4. Think about your own interests, skills, and opportunities. In what areas do you potentially have a comparative advantage over your peers or co-workers? Are there goods or services you could provide to others more efficiently? How could you maximize your advantages to achieve positive gains from trade…
- Question 1 Consider the standard trade model with two goods and two factors, labour and capital. (a) Suppose that a country experiences an increase in its capital stock. How would the production possibility frontier change as a result? Illustrate this with a simple twogood diagram. (B) Consider two countries: Home and Foreign. Each country produces two goods, cloth (C) and food (F). Assume Home is an exporter of cloth. Assume also that Home is a large country. Now suppose Home imposes a 20 percent tariff on the value of food imports. What will be the effect of the food tariff on the relative price of cloth and terms of trade? Illustrate your answer with a relevant diagram.If a country closes off to trade and notices that the number of firms in an industry doubles in size, what economic theory would help us explain this phenomenon? A. Stolper-Samuelson. B. Melitz. C. Ricardian. D. Cournot. Explain your answer in up to 200 words and using a diagramInternational Trade Suppose the production of chocolate and wine per hour of labor in Italy and France is as follows: Chocolate (C) Wine (W) Italy (I) 8 bars 4 bottles France (F) 6 bars 2 bottles a) Which country has the absolute advantage in chocolate production? Does the same country also have the comparative advantage in chocolate production? Explain your answers. b) Suppose that with free trade the price of one bottle of wine is 2.5 bars of chocolate. Further suppose that 100 million hours of labor are available in both countries. Carefully draw the production possibility curves in each country both with and without free trade. With reference to the graphs, briefly explain in words how free trade can help both countries become better off.