User Account

All Pages

How international trade affect wheat production in argentina

Assignment Help Microeconomics
Reference no: EM13893308

Argentina and New Zealand each produce wheat and mutton under conditions of perfect competition, as shown on the accompanying production possibilities curves. Assume that there is no trade between the two countries and that Argentina is now producing at point A and New Zealand at point C. What is the opportunity cost of producing each good in Argentina? What is the opportunity cost of producing each good in New Zealand? Which country has a comparative advantage in which good? Explain.

Explain how international trade would affect wheat production in Argentina. How would international trade affect mutton production? Explain how international trade would affect wheat production in New Zealand. How would it affect mutton production? How would trade between the two countries affect consumption of wheat and mutton in each country? Assume that trade opens between Argentina and New Zealand and that, with trade, a pound of mutton exchanges for a bushel of wheat. Before trade, Argentina produced at point A and New Zealand produced at point C. Argentina moves to point B, while New Zealand moves to point D.

Calculate and illustrate graphically an exchange between Argentina and New Zealand that would leave both countries with more of both goods than they had before trade. Assume that the world market for producing radios is monopolistically competitive. Suppose that the price of a typical radio is $25. Why is this market likely to be characterized by two-way trade?

Suppose that Country A levies a tax of $5 on each radio produced within its borders. Will radios continue to be produced in Country A? If they are, what will happen to their price? If they are not, who will produce them? If you concluded that radios will continue to be produced in Country A, explain what will happen to their price in the short run. Illustrate your answer graphically. What will happen to their price in the long run?

Reference no: EM13893308

Questions Cloud

Seriously restrict immigration of production : Many industrialized countries such as the United States attempt to seriously restrict immigration of production workers, but are more open to immigrants who are highly-skilled. Why might this be the case? Why is this a problem for developing countrie..
Direct investment inflows by foreigners : Direct investment inflows by foreigners into the United States have been sizable in recent years. How might this net inward movement of capital affect the level and pattern of U.S. trade according to the Heckscher-Ohlin model? The level of world outp..
Contributed to current us net direct investment position : Explain the underlying basis for foreign direct investment, and discuss several factors that may contribute to it. What factors have likely contributed to the current U.S. net direct investment position?
Null pointer problem : What is the only thing that you should ever do with the NULL pointer? In the following declaration, explain what type p is, and describe how it might be used.
How international trade affect wheat production in argentina : Calculate and illustrate graphically an exchange between Argentina and New Zealand that would leave both countries with more of both goods than they had before trade. Assume that the world market for producing radios is monopolistically competitiv..
Capital stock and improvements in labor productivity : Why is it difficult to analyze the welfare implications of growth in the neoclassical model? What proxy is often used to reach a conclusion about the effects of growth? What leads to the conclusion that, if welfare is to improve with growth in the la..
Terms of trade might deteriorate as economic growth occurs : Developing countries are often concerned that their terms of trade might deteriorate as economic growth occurs. In terms of the analysis of part (a) of this question, other things equal, what type(s) of growth must occur and what type of country (“la..
Role of a consultant : Assume the role of a consultant advising a benefits manager for a local telecommunications organization. The company is self-funded and has 25,000 employees, dependents, and retirees eligible for health benefits
Pro trade production growth effect : It is likely that a pro trade production growth effect will lead to an expansion of trade since the presence of inferior goods is relatively rare. Explain.

Reviews

Write a Review

Microeconomics Questions & Answers

  Long-short-run aggregate supply curves reflect fundamental

The long-run and short-run aggregate supply curves reflect fundamental differences between long run and short-run macroeconomic analysis. Graphically illustrate the long-run and short-run aggregate supply curves. Be sure to label the axes

  Why the difference in profit margins

Why the difference in profit margins and The market for operating systems is dominated by a single seller (Microsoft), while the software retail market is competitive.

  What is the path of market exchange rate likely to be over

A country has had a steady value for its floating exchange rate (stated inversely as the domestic currency price of foreign currency) for a number of years. The country now tightens up on (reduces) its money supply dramatically.

  Accounting for supply by the competitive fringe

The world willingness to pay for oil is given by P = 200 - Q, with P in dollars per barrel and Q in thousands of barrels per month, and OPEC is planning its strategy to set the world oil price. The competitive fringe of small firms takes the price OP..

  Find the price elasticity of demand for each group at the

The director of a theater company in a small college town is considering changing the way he prices tickets. He has hired an economic consulting firm to estimate the demand for tickets.

  Illustrate your answer with supply and demand curves

During the last 10 years Orlando, Florida, grew rapidly, with new jobs luring young people into the area. Despite increases in population and income growth that expanded demand for housing, the of price of existing houses barely increases. Why? Illus..

  Should the club cover explicit and implicit costs

Should the club cover explicit and implicit costs? Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs?

  1 construct the coutrnot profit function differentiate this

1. construct the coutrnot profit function. differentiate this function and solve for the reaction functions of firm one

  Forty years ago, the price of a new volkswagen

Forty years ago, the price of a new Volkswagen was $5,000. (Actual price adjusted to simplify the calculation). The price of a new Volkswagen is $25,000 today. Basing your answer solely on the aforementioned prices, by what percent have prices increa..

  Calculate own price elasticity and cross price elasticity

Suppose the market supply function is Qs = 1.2P2 - 0.5PE - 10PL, where PE and PL are price of energy and labor, respectively. Calculate the own price elasticity and cross price elasticity of energy and labor if P = 20, PE = 70, and PL = 40.

  A firm is considering 2 capital investment projects

A firm is considering 2 capital investment projects. Project A involves an initial cost of $125,000. The discounted present value of all future cash flows is $145,000. Project B requires an initial expenditure of $85,000. The discounted present value..

  The firm has an accounting profit

Suppose that a firm produces 20000 units a year and sells them all for $10 each. The explicit costs of production are $1500000 and the implicit costs of production are $ 300000. The firm has an accounting profit of?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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