Does any country have an absolute advantage in both goods

Assignment Help Econometrics
Reference no: EM13222241

England and Scotland both produce scones and sweaters. Suppose England can produce 50 scones per hour or 1 sweater per hour. Suppose Scotland can produce 40 scones per hour or 2 sweaters per hour. Before trade England produces 25 scones and 0.5 (one half) sweaters per hour. Scotland produces 20 scones and 1 sweater per hour.

a) Draw the PPF for each (put same goods on same axes for each country and connect them with a straight line). Label your diagram appropriately.

b) Does any country have an absolute advantage in both goods? Explain.

c) Identify which country has comp advantage in each good. Show your reasoning and show all computations.

d) Who should specialize in each good if trade is to occur between each country? Explain your reasoning

e) Explain the potential range of prices possible that would allow mutually beneficial trade.

f) Suppose that the countries choose to trade at a price of 35 scones for one sweater. Show the outcome after trade on your PPF and explain whether it is possible that each country is better after trade and why.

Reference no: EM13222241

Questions Cloud

Fins amount of barley and alfalfa each farmer can produce : Jason and Stasis are farmers. Each one owns a 20-acre plot of land. The table below shows amount of barley and alfalfa each farmer can produce on a given acre. Both farmers can choose whether to devote all 20 acre to producing barley, devote all 2..
Explain what is the concentraton of kmno4 solution : 5H2C2O4(aq) + 2KMnO4(aq) + 3H2SO4(aq) ---> 10CO2(g) + 2MnSO4(aq) + K2SO4(aq) + 8H2O(l). What is the concentraton of KMnO4 solution if 22.35mL reacts with 0.5170g of oxalic acid.
Calculate fund managers average : Calculate each fund manager's average "alpha" (?) (i.e. actual return minus expected return) over the 5-year holding period. Show graphically where these ? statistics would plot on the security market line (SML).
Explain what is the absolute pressure of the gas : What is the gauge pressure of the gas in this mercury manometer if h = 53 mm and the atmospheric pressure is 781 mmHg? What is the absolute pressure of the gas?
Does any country have an absolute advantage in both goods : England and Scotland both produce scones and sweaters. Suppose England can produce 50 scones per hour or 1 sweater per hour. Suppose Scotland can produce 40 scones per hour or 2 sweaters per hour. Before trade England produces 25 scones and 0.5.
Explain how do find the concentration : How do we find the concentration, c, depending on thiele modulus and the particle diameter? We do not know the value of thiele modulus.
Compare the components of wal-marts inventory : Wal-Mart has one of the largest total inventory values of any American company. Compare the components of Wal-marts inventory to that of the Harley-Davidson. How do they differ? Why?
Compute a consumer price index for apples for each year : Abby consumes only apples. In year1, red apples cost $1 each, green apples cost $2 each, and Abby buys 10 red apples. In year 2, red apples cost $2, green apples cost $1, and Abby buys 10 green apples. a. Compute a consumer price index for apples f..
What is the slope : Use trend projection to obtain forecast for years 5 and 6.

Reviews

Write a Review

Econometrics Questions & Answers

  Design a simple econometric research project

Design a simple econometric research project

  Multiplicative decomposition method

Multiplicative decomposition method

  Market for cigarettes

The Australian government administers two programs that affect the market for cigarettes.

  Solve the forecast model

Solve the forecast model

  What are the marginal abatement cost functions

What are the marginal abatement cost functions for each of the two areas? Calculate the loss in the two areas due to over-control (for the rural area) and under-control (for the urban area).

  Write the t statistic for testing the null hypothesis

Explain why this model violates the assumption of no perfect collinearity.  Write the t statistic for testing the null hypothesis

  What is economics system

What is economics system? What are the types of economics system? Briefly explain each type of economics system by giving examples of nations that are close to each type

  Multiple choice questions related to market concentration

Determine when a competitively produced product generates negative externalities in production, the industry will,

  Calculating number of units produced by firm

Assume a company has the following production function: Q = 100 K.5 L1 . Currently, the company hires 1,000 workers and employs 100 units of capital.

  Question about mobile commerce

M-commerce also known as mobile commerce is being lumped in with several strategic internet plans. Explain some of the industries that are likely to use mobile commerce and how it is working for them.

  Calculating the average days past due and average flow time

Auto Data manufactures custom engineering testing machine. The following 5-orders are currently in the design department:

  Mechanism of an english auction and second price auction

Briefly discuss the difference between mechanism of an oral or English auction and a Vickrey or second price auction.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd