Assume the usa also canada are considering to trade

Assignment Help Macroeconomics
Reference no: EM1339880

Explain the Concept of Comparative and Absolute Advantage

Suppose the USA and Canada are considering to trade. Assume there are only two goods in the economy: potatoes and rice. The table below illustrates what each country can produce in a given year.

Potatoes Rice

USA 8 4

Canada 10 16

1. In this case, which country should produce potatoes? Why? Hint: calculate the opportunity cost for each country. For instance, USA can produce 8 units of potatoes OR 4 units of rice. In this case, if the USA produces one unit of rice, then it has to give up 2 units of potatoes

2. How does trade affect the production possibilities frontier?

3. Give 5 factors that can expand the production possibilities frontier.

 

Reference no: EM1339880

Questions Cloud

Computing number of units be produced in third quarter : How many units must be produced in the third quarter?
Explain equal protection clause : Explain Equal Protection Clause and Identify and define the three standards of review used by the Supreme Court when deciding cases under the Equal Protection Clause
Describe capital structure : Mary Francis has just returned to her office after attending preliminary discussions with investment bankers. Describe capital structure.
What will be the base sequence of rna : What will be the base sequence of RNA
Assume the usa also canada are considering to trade : Assume the USA and Canada are considering to trade. Assume there are only two goods in the economy: potatoes and rice. The table below illustrates what each country can produce in a given year.
Concept of social loafing : Describe the concept of "social loafing" or "soldiering" as it relates to worker productivity and property ownership.
Define why a change in amino acid sequence might affect : define why a change in amino acid sequence might affect
Explain american recovery and reinvestment act 2009 : Explain American Recovery and Reinvestment Act 2009 and How the Tax Shield could help a business who is about to close their doors gain control over their debt financing
Determine the better option for investor : If a manager receives part of their salary based on how the portfolios they manage are performing then the manager would want to see his or her portfolio have a high return. Determine the better option for investor.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd