Customer Service Chat
Get quote & make Payment
Describe the trade triangles, Microeconomics
Steel and aluminum production
Steel Canada 500, France 1200
Aluminum Canada 1500, France 800
The maximum amount of steel or aluminum that Canada and France can produce if they fully use all the factors of production at thier disposal with the best technology available to them (hypothetically) is listed above.
Assume that production occurs under constant-cost conditions. On graph paper,draw the production possibilities schedules for Canada and France; locate aluminum on the horizontal axis and steel on the vertical axis of each countries graph. In the absence of trade, assume that Canada produces and consumes 600 tons of aluminum and 300 tons of steel and that France produces and consumes 400 tons of aluminum and 600 tons of steel. Denote these autarky points on each nation''s production possibility schedule.
a. Determine the MRT of steel into aluminum for each nation. According to the principle of comparative advantage, should the two nations specialize? If so, which product should each country produce?Will the extent of specialization be complete or partial? Denote each nation''s specialization point on its production possibilities schedule. Compared to the output of steel and aluminum that occurs in the absence of trade, does specialization yeild increases in output? If so, by how much?
b. Within what limits will the terms of trade lie if specialization and trade occur? Suppose Canada and France agree to a terms-of-trade ratio of 1:1 (1 ton od steel = 1 ton of aluminum). Draw the terms-of-trade line in the diagram of each nation. Assuming that 500 tons of steel are traded for 500 tons of aluminum, are Canadian consumers better off as a result of trade? If so, by how much? How about French consumers?
c. Describe the trade triangles for Canada and France.
Posted Date: 5/12/2012 12:14:59 PM | Location : United States
Ask an Expert
Describe the trade triangles, Assignment Help, Ask Question on Describe the trade triangles, Get Answer, Expert's Help, Describe the trade triangles Discussions
Write discussion on Describe the trade triangles
Your posts are moderated
Write your message here..
Graph & calulations, Not sure how to graph & calculate a retail price of $3...
Not sure how to graph & calculate a retail price of $30 & avg cost $20 assuming that the equation for demand is Q=10,000-9,000P, where P=retail price & Q=# sold per month.Then to s
Double jeopardy, Double Jeopardy A condition where an entrepreneur's m...
Double Jeopardy A condition where an entrepreneur's main source of income and net worth depend on the entrepreneur's organization.
Ionization energy or ionization potential, Describe Ionization energy or io...
Describe Ionization energy or ionization potential and The factors affecting the ionization energies
#titleGMP, WHAT IA GMP
WHAT IA GMP
Economic growth, Summarize the four supply factors in economic growth.
Summarize the four supply factors in economic growth.
Price index?, What was the price index for 2008, 2009 and 2010?
What was the price index for 2008, 2009 and 2010?
Determine the wage of labor, Consider a hypothetical nation, Solowland, whi...
Consider a hypothetical nation, Solowland, which were in the steady state. We consider a constant return to scale production function based on two production factors, labor and cap
Explain the term heteroscedasticity, Question 1: (a) Using examples, ex...
Question 1: (a) Using examples, explain the difference between time-series, cross-sectional, and panel data. (b) Formulate a simple linear equation, and carefully explain
#theory of consumer., Ask question #what is an indifference curveMinimum 10...
Ask question #what is an indifference curveMinimum 100 words accepted#
Advanced microeconomics, PRODUCTION AND PRODUCTIVITY DIAGRAM BEHAVIORAL REL...
PRODUCTION AND PRODUCTIVITY DIAGRAM BEHAVIORAL RELATIONSHIP
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
Why Us ?
~24x7 hrs Support
~Quality of Work
~Time on Delivery
~Privacy of Work
Human Resource Management
Literature Review Writing Help
Follow Us |
T & C
Copyright by ExpertsMind IT Educational Pvt. Ltd.