What is the slope of the price line at which trade occurs

Assignment Help Microeconomics

Reference no: EM13902708

1. In the analysis of an exchange between two people, suppose both people have identical preferences. Will the contract curve be a straight line? Explain. Can you think of a counterexample?

2. Give an example of conditions when the production possibilities frontier might not be concave.

a. A monopsonist buys labor for less than the competi- tive wage. What type of inefficiency will this use of monopsony power cause? How would your answerWhich country has a comparative advantage in the production of each good? Explain.

b. Determine the production possibilities curve for each country, both graphically and algebraically. (Label the pretrade production point PT and the post-trade point P.)

c. Given that 36 pounds of cheese and 9 bottles of wine are traded, label the post-trade consumption point C.

d. Prove that both countries have gained from trade.

e. What is the slope of the price line at which trade occurs?

Reference no: EM13902708

Questions Cloud

The proper response by american colonists concerning : The proper response by American colonists concerning the standing presence of British officials and soldiers

Difference between adverse selection and moral hazard : Describe several ways in which sellers can convince buyers that their products are of high quality. Which methods apply to the following products: Maytag washing machines, Burger King hamburgers, large diamonds?

Why asymmetric information between buyers and sellers lead : If the used car market is a "lemons" market, how would you expect the repair record of used cars that are sold to compare with the repair record of those not sold?

Find the cost each of one apple pie : Kathryn and Shayna are selling pies for a school fundraiser. Customers can buy apple pies and pumpkin pies. Kathryn sold 3 apple pies and 13 pumpkin pies for a total of $164. Shayna sold 9 apple pies and 5 pumpkin pies for a total of $118. Find th..

What is the slope of the price line at which trade occurs : A monopsonist buys labor for less than the competi- tive wage. What type of inefficiency will this use of monopsony power cause? How would your answerWhich country has a comparative advantage in the production of each good? Explain.

Differences between arteries and veins : differences between arteries and veins

Explains the nature of the organization : Explains the nature of the organization (industry, products, and/or services), how it uses joint-process costing, and how important you believe joint- process costs are to its decision making.

Was the study performed according to the original protocol? : Was the study performed according to the original protocol?

How does this change affect the production contract curve : In the context of our analysis of the Edgeworth pro- duction box, suppose that a new invention changes a constant-returns-to-scale food production process into one that exhibits sharply increasing returns. How does this change affect the productio..

User Account

All Pages