Mutually beneficial terms of trade between the two countries

Assignment Help Business Economics

Reference no: EM13998361

An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 80 minutes and an ounce of coffee in 120 minutes. Also suppose that both countries have 960 minutes of total worker time available in a given period.

(i) Draw fully labeled production possibility frontiers for Brazil and Peru. Please put coffee on the X axis and soybeans on the Y axis.

(ii) Specify mutually beneficial terms of trade between the two countries.

(iii) On the same graph as the PPFs, draw fully labeled consumption possibility frontiers based on the terms of trade you've given in part ii

Please explain in detail

Reference no: EM13998361

Questions Cloud

Demand is relatively elastic-supply is relatively inelastic : All else equal, if demand is relatively elastic and supply is relatively inelastic, a tax on a product will cause:

A tax imposed on the supplier of blu ray players shifts : A tax imposed on the supplier of Blu Ray players shifts

Affecting gasoline prices at the pump or gas stations : Please take a few days to help me conduct a research on the history of crude oil prices and give me a 100-150 word essay on how recent crude oil prices are affecting gasoline prices at the pump or gas stations

Futures unlimited corporation makes output-price decisions : Imagine that it is the year 2199. Technology has progressed at an incredible pace. The latest discovery is the plutonium engine, which is capable of converting plutonium, a by-product of nuclear fission, into fuel to power the nuclear reactors in our..

Mutually beneficial terms of trade between the two countries : An average worker in Brazil can produce an ounce of soybeans in 20 minutes and an ounce of coffee in 60 minutes, while an average worker in Peru can produce an ounce of soybeans in 80 minutes and an ounce of coffee in 120 minutes. Draw fully labeled ..

Consider the ricardian model-describe the patterns of trade : Consider the Ricardian model. Home has 1200 unites of labor available. It can produce two goods, apples (A) and bananas (B). The unit labor requirement in apple production is 3, while in banana production it is 2. Construct the world relative supply ..

Look for hidden premises and complex arguments : In this exercise, you have to look for hidden premises and complex arguments. As your text notes, A hidden premise is a premise that is implied, but not stated. Drug dealing should not be a crime because it does not directly harm others or force them..

Describes an increase in demand-decrease in demand : Indicate whether each of the following statements describes an increase in demand, decrease in demand, change in quantity demanded, increase in supply, decrease in supply, or change in quantity supplied in the given market.

What historical events demonstrate various relationships : Following WWII, a rift emerged between the capitalist nations of the West and the communist nations of the East after World War II. In an attempt to orchestrate the economic and internal affairs of Eastern European communist nations, the Soviet Union..

User Account

All Pages