Customer Service Chat
Get quote & make Payment
International economics question 1, 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 6:24:35 PM | Location : United States
Ask an Expert
International economics question 1, Assignment Help, Ask Question on International economics question 1, Get Answer, Expert's Help, International economics question 1 Discussions
Write discussion on International economics question 1
Your posts are moderated
Write your message here..
Asymmetric information, optimal contracts under symmetric information
optimal contracts under symmetric information
Determine the price elasticity of demand, Given the following demand and to...
Given the following demand and total cost functions for a firm P = 4500 - 0.5Q 2 TC = 1.5Q 3 - 50Q 2 + 1000 i) the marginal profit function
Describe theory of purchasing power parity, Question 1: (a) Using examp...
Question 1: (a) Using examples, explain how the theory of Purchasing Power Parity conforms to the Law of One Price. (b) According to you, how best does the Theory of Purchasing
Functions of money in any modern economy, Functions of money in any modern ...
Functions of money in any modern economy: A medium of exchange: Money facilitates the exchange of goods and services because, people exchange the goods and services they produ
Potentials of productivity growth, Potentials of Productivity Growth: ...
Potentials of Productivity Growth: It needs to be noted that growth in productivity witnessed in the past are an average rate at the All-India level. There are considerable re
Effect of effluent fees on the firm input choices, The Effect of Effluent F...
The Effect of Effluent Fees on the Firms' Input Choices * Firms which have a by-product to production produce an effluent. * An effluent fee is a per unit fee which firms
Marxism, Hi, Can you help with writing ten pages, each page deferent topics...
Hi, Can you help with writing ten pages, each page deferent topics about Karl Marx economic views. It will be in english as a second language. Nothing fancy. Just simple straight
#title., comprehensively discuss the market structure in the South African ...
comprehensively discuss the market structure in the South African mobile telecommunication industry
What is the difference between scarcity and shortage, What is the differenc...
What is the difference between 'scarcity' and 'shortage'? 'Scarcity' and 'shortage' have dissimilar definitions. In reality, when most of the goods and resources are scarce go
Types of budget, Types of budget: Surplus Budget: A surplus budget o...
Types of budget: Surplus Budget: A surplus budget occurs when the expected government revenue is planned to exceed the proposed government expenditure. It can be achieved by
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.