Microeconomics
2nd Edition
ISBN: 9781259813337
Author: KARLAN, Dean S., Morduch, Jonathan
Publisher: Mcgraw-hill Education,
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Question
Chapter 2, Problem 3PA
To determine
(a)
To calculate: the maximum amount of lumber to be produced in a day.
To determine
(b)
To calculate: the maximum amount of fish to be produced in a day.
To determine
(c)
To draw: the
To determine
(d)
To calculate: the amount of fish to be produced in a day when 60 million lumber is cut.
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The following table shows the amount of good A and good B that two countries could produce if they devoted all their resources to that good. Assume both countries have the same quantity of resources and the trade-off between good A and good B remains constant as resources are shifted from one good to another. Answer the questions below and show calculations where appropriate.
Canada
India
Good A
600
500
Good B
950
1200
Draw a straight-line PPF graph for Canada.
Draw a straight-line PPF graph for India.
Which country has the comparative advantage in good A? In good B? Explain.
What is India’s marginal opportunity cost of producing good A? Good B?
Based on the data given, what is the terms of trade range for good A in terms of units of good B?
The table below shows how many millions of cars and trucks each country can
produce in one year. Based on the information, which of the following is true?
Maximum
Country
Country
outputs
A
B
CARS
30 m
35 m
TRUCKS
6 m
21 m
Copyright: www.economicsonline.co.uk
Country A has the comparative advantage in trucks
Country B has the comparative advantage in cars
Country A has the comparative advantage in cars
Country A has the absolute advantage in cars
For the first part I have drawn a graph but now it is wanting a graph drawn in U.S dollars showing clearly the price that the US importers (the buyers) pay and the quantity of trade that will occur. I have attached my first graph I have made along with the equations given. But I do not understand how to make this graph.
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