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Q. Opportunity Cost and PPF Assume Australia and New Zealand each have 100 acres of land available for farming of wheat and cotton.
A. Graph PPF for each nation.
B. Which nation has comparative advantage in wheat production? In cotton production? Which nation has absolute advantage in wheat production? In cotton production?
C. Assume New Zealand and Australia are consuming and producing 480 bushels of wheat and 240 bales of cotton and 240 bushels of wheat and 480 bales of cotton respectively. Elucidate how both countries could be made better off by trading.
Illustrate what is the reason the productivity also real incomes of workers in the industrially advanced economies have risen historically partly.
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Illustrate what effect will each of the following events have on the current account balance and the exchange rate if the exchange rate is fixed.
When a society under allocates resources to the construction of a good or service, it indicates
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Suppose which Sam is now growing wheat on enough land to produce 7,000 bushels of wheat. Illustrate what is the opportunity cost.
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