Econ Stuff

Suppose the United States and Mexico both produce hamburgers and tacos. The combinations of the two goods that each country can produce in one day are presented in the table below. Which country has an absolute advantage in producing​ tacos? The United States. Which country has a comparative advantage in producing​ tacos? Mexico. Suppose the United States is currently producing 2 tons of hamburgers and 6 tons of tacos and Mexico is currently producing 2 tons of hamburgers and 5 tons of tacos. If the United States and Mexico each specialize in producing only one good​ (the good for which each has a comparative​ advantage), then a total of 8 additional​ ton(s) of hamburgers can be produced for the two countries combined ​(enter a numeric response using an​ integer) and a total of 4 additional​ ton(s) of tacos can be produced.

(1) Since US can produce more tacos than Mexico can (18 > 15), US has absolute advantage in tacos. (2)Opportunity cost of taco in US = 30/18 = 1.66... hamburgers Opportunity cost of taco in Mexico = 3/15 = 0.2 hamburgers Since Mexico can produce taco at lower opportunity cost (0.2 < 1.66...), Mexico has comparative advantage in taco. US 30 hamburgers and 6 tacos and Mexico 2 hamburgers and 5 Tacos. So the old production of Hamburger: 30-(20+2)= 8 burgers Tacos: 15-(6+5) = 4 Hamburgers

The following table shows the hourly output per worker measured as quarts of olive oil and pounds of pasta in Greece and​ Italy: The opportunity cost of producing one more quart of olive oil in Greece is . 25.25 pounds of pasta. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more quart of olive oil in Italy is 44 pounds of pasta. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more pound of pasta in Greece is 44 quarts of olive oil. ​(Enter your response rounded to two decimal​ places.) The opportunity cost of producing one more pound of pasta in Italy is . 25.25 quarts of olive oil.

1. 2/8= .25 2. 20/5= 4 3. 8/2= 4 4.5/20= .25

Use the following production possibilities frontier for a country to answer the following questions. Which​ point(s) are​ unattainable? Briefly explain why. Which​ point(s) are​ efficient? Briefly explain why. Which​ point(s) are​ inefficient? Briefly explain why. At which point is the​ country's future growth rate likely to be the​ highest? Briefly explain why.

1. Point Z because it is outside the production possibility Frontier. 2. W, X, and Y because this is where maximum output is produced with available resources. 3. Point V because production there is not using all the available resources. 4. Point W because it is where the most resources are used to produce capital goods.

Which of the following is not scarce according to the economic​ definition?

A.Healthcare services. B.Time. C.Coal. D.Capital. E.None of the above. Answer: E. None of the above

Suppose we can divide all the goods produced by an economy into two​ types: consumption goods and capital goods. Capital​ goods, such as​ machinery, equipment, and​ computers, are goods used to produce other goods. Suppose that Liechtenstein and Luxembourg currently have identical production possibilities frontiers but that Liechtenstein devotes only 5 percent of its resources to producing capital goods over each of the next 10​ years, while Luxembourg devotes 30 percent. Which country is likely to experience more rapid economic growth in the​ future? Luxembourg 1.) Use the​ three-point curved drawing tool to illustrate​ Liechtenstein's PPF 10 years in the future. Label the PPF​ 'A future'. ​2.) Use the​ three-point curved drawing tool to illustrate​ Luxembourg's PPF 10 years in the future. Label the PPF​ 'B future'. Carefully follow the instructions​ above, and only draw the required objects.

Capital Goods are the goods that are used to produce other goods. A country that invests greater amount in capital good at present would be able to produce greater quantity of all the goods in future. It has been stated that Lichtenstein devotes only 5 percent of its resources for production of capital goods whereas Luxembourg devotes 30 percent of its resources for production of capital goods. Since, Luxembourg is devoting greater amount of resources towards the capital goods relative to Lichtenstein, the productive ability of Luxembourg would be greater than the Lichtenstein in the future. This would enable the Luxembourg to produce greater quantity of all goods relative to Lichtenstein. So, PPF of Luxembourg would shift more outward than the PPF of Lichtenstein. Following is the requirde figure -

What do economists mean by​ scarcity?

Economists mean that unlimited wants exceed limited resources.

Suppose that France and Germany both produce wine and cheese. The table below shows combinations of the goods that each country can produce in a day. Who has the comparative advantage in producing wine and who has the comparative advantage in producing​ cheese? Suppose that France is currently producing 1 bottle of wine and 6 pounds of cheese and Germany is currently producing 3 bottles of wine and 8 pounds of cheese. ​ Then, assume instead that France and Germany specialize by producing only the good for which they have a comparative advantage and then trade 3 bottles of wine for 9 pounds of cheese. After specialization and​ trade, France gains by consuming the same amount of wine and 33 additional​ pound(s) of cheese ​(enter a numeric response using an​ integer) and Germany gains by consuming the same amount of wine and 33 additional​ pound(s) of cheese.

France has a comparative advantage producing wine and Germany has a comparative advantage producing cheese ^Because, when you divide 8/4=2, France will produce 2 pounds less cheese while Germany 20/5=4, will produce 4 less. Which ever one is less, has a better opportunity cost in that field and vice versa. France: 3 Cheese difference Germany: 3 Cheese difference

Tom's lawn service specializes in mowing lawns and trimming bushes. Tom has 4 hours to devote to lawn services. In 1​ hour, he can mow 4 lawns or trim 8 bushes. Use the line drawing tool to graph​ Tom's production possibilities frontier given he has 4 hours to devote to lawn services. Properly label this line. Carefully follow the instructions​ above, and only draw the required objects. ​Tom's opportunity cost of mowing lawns in terms of trimming bushes is (how many) trimmed bushes per mowed lawn.

In 4 hours he can mow 3 lawns: 4*4=16 (Quantity of Lawns, Y) in 4 hours he can trim 8 bushes: 4*8= 32 (Quantity of bushes, X) To find Tom's opportunity cost: Quantity of bushes/Quantity of lawns, 32/16= 2

Consider the production possibilities frontier (PPF​​) that shows the​ trade-off between the production of cotton and the production of soybeans depicted in the figure to the right. Use the​ three-point curved line drawing tool to show the effect that improved fertilizers would have on the initial production possibilities frontier by drawing a new production possibilities frontier. Properly label this curve. .

There will be an increase in the production of cotton and soybeans. So, The PPF will shift to the right.

The production possibilities frontier will shift outward

if resources are used to produce capital goods.

A production possibilities​ frontier

shows the maximum attainable combinations of two goods that may be produced with available resources.

We can show economic​ inefficiency:

with points inside the production possibilities frontier.

We can show economic​ efficiency:

with points on the production possibilities frontier.