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The accompanying hypothetical production possibilies tables are for New Zealand and Spain. Each country can produce apples and plums. Plot the production possibilities data for each of the two countries separately. Referring to your graphs, answer the following: (a) What is each country’s ratio of producing plums and apples? (b) Which nation should specialize in which product? (c) Show the trading possibilities lines for each nation if the actual terms of trade are 1 plum for 2 apples. (Plot these lines on your graph.) (d)Suppose the optimum product mixes before specialization and trade were alternative B in New Zealand and alternative S in Spain. What would be the gains from specialization and trade?
suppose the domestic and foreign interest rates are both initially equal to 4%. Now suppose the foreign interest rate rises to 6%. Explain what effect this will have on the exchange rate. Also explain what must occur for the interest parity condition..
Productivity growth measures increase in output per hour of work. Output per hour of work was 54.0 in the first quarter of 1973, 75.4 in the first quarter of 1996, and 111.0 in the first quarter of 2010 (2005=100). Calculate the average annual rates ..
A firm uses capital and labor to produce output according to the production function q =4 rad(KL) , for which MP L= 2 rad(K/L) and MP K= 2 rad(L/K). If the wage w=$1/labor-hr. and the rental rate of capital r=$4/machine-hr., what is the least expensi..
Administrative agencies: Select one: a. Rarely have both the power to issue regulations and the power to investigate when such regulations have been violated b. May make regulations that are advisory in nature, but cannot make regulations that have t..
Over the past year the Texas Legislature along with others around the country have sought to change history books to downplay the negative aspects and promote the positive aspects of American History. Should college history classes be "washed" of the..
In an oligopolistic market, firms pay close attention to the strategies of their rivals. In monopolistic competition, with a large number of sellers, it is assumed that there is not this kind of rivalry, or interdependence. Why is there probably some..
Suppose that an initial $40 billion increase in investment spending expands GDP by $40 billion in the first round of the multiplier process. Also assume that GDP and consumption both rise by $24 billion in the second round of the process. Instruction..
What type of UAE companies would like to see higher tariffs and what type would like to seelower or no tariffs? And why is this the case?
A new good or service for an existing business or a business that you want to develop and how will you determine the profit-maximizing quantity?
A trend analysis for a farm business could be performed using what kind of data for comparison?
A company buys a machine for $12,000, which it agrees to pay for in five equal annual payments, beginning one year after the date of purchase, at an annual interest rate of 4%. Immediately after the second payment, the terms of the agreement are chan..
Let us suppose that the consumer is choosing between beer and milk. The consumer will always prefer beer to milk. However, if the consumer has two choose between two consumption bundles having equal amounts of beer and different amounts of milk, then..
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