Describe how with trade nebraska end up with 80 million

Reference no: EM13388680

Suppose there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. For Nebraska the opportunity cost of producing 3 bushels of wheat is 1 bushel of corn. At present, Iowa produces 60 million bushels of wheat and 360 million bushels of corn, while Nebraska produces 60 million bushels of corn and 360 million bushels of wheat.

a. Explain how, with trade, Nebraska can end up with 80 million bushels of wheat and 360 million bushels of corn while Iowa can end up with 80 million bushels of corn and 360 million bushels of wheat.

To maximize production of both states, Iowa should produce____million bushels of corn and___ million bushels of wheat, while Nebraska should produce___million bushels of wheat and___million bushels of corn. Iowa can trade a maximum of___million bushels of corn for the___million bushels of wheat that it needs. Nebraska can trade a maximum of___million bushels of wheat for the___million bushels of corn it needs.

b. If the states ended up with the numbers given in a, assuming the person who arranges the trade (the trader) gets the remainder, how much would the trader get?

Reference no: EM13388680

Questions Cloud

Formulate the adirondack paper mills problem as a linear : adirondack paper mills inc. has paper plants in augusta maine and tupper lake new york.nbsp warehouse facilities are

The initial investment needed for plant and equipment is : patricia zell a dollmaker from olney maryland is interested in the mass marketing and production of a ceramic doll of

Wilson wonders bonds have 12 years remaining to maturity : discuss the relationship between the price of a bond and interest rates. why does the price of a bond change over its

In a job shop operation four jobs may be performed on any : in a job shop operation four jobs may be performed on any of four machines.nbsp the number of hours required for each

Describe how with trade nebraska end up with 80 million : suppose there are two states that do not trade iowa and nebraska. each state produces the same two goods corn and

Formulate the problem as a linear program with optimal : premier consulting has two consultants avery and baker who can be scheduled to work for clients up to a maximum of 160

There is an agricultural field directly next to the : students should read the scenarios below and respond in the form of an essay which should consist of several paragraphs

Create a journal entry and a t-account entry for each of : create a journal entry and a t-account entry for each of the following transactionsa. 30000 worth of supplies purchased

Find out the average length of the waiting line and the : mcburgers fast-food restaurant has a drive-through window with a single server who takes orders from an intercom and

User Account

All Pages