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- Suppose we extend the circular flow model to add imports and exports. Copy the circular flow diagram onto a sheet of paper and then add a foreign county as a third agent. Draw a rough sketch of the flows of imports, exports, and the payment for each on your diagram.Consider two neighboring island countries called Felicidad and Bellissima. They each have 4 million labor hours available per week that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor. Jeans Corn Country (Pairs per hour of labor) (Bushels per hour of labor) Felicidad 4 16 Bellissima 12 Initially, suppose Bellissima uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce corn, while Felicidad uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce corn. Consequently, Felicidad produces 12 million pairs of jeans and 16 million bushels of corn, and Bellissima produces 6 million pairs of jeans and 36 million bushels of corn. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it…Output of Consumer Goods (units per year) D O с E G B Output of Military Goods (units per year) Iceland has no military. a. So, at what point in the figure is Iceland producing? point (Click to select) ✓ b. If Iceland decided to produce the quantity OE of military goods, how much consumer output would it have to give up? Give up quantity (Click to select)
- If Texia specializes in food, it can produce 1,000 units of food and 0 units of clethingg this year If it specializes in clothing, it can produce 500 units of clothing and O units of food. This year Urbania can produce either 500 units of food and O units of clothing or 200 units of cleth and O units of food. (assume linear production possibility frontiers) has the comparative advantage in the production of clothing and comparative advantage in the production of food. has the Urbania; Texia O Texia; Texia Urbania; Urbania Texia; UrbaniaDI One of the principle uses of gravity models is the identification of anomalies in trade. O el t Vi 5 D The figure to the right summarizes 2006 data (Source: CIA World Factbook) for the seven Central American economies and their trade with the United States. Legend Belize B CR Costa Rica ESEl Salvador G Guatemala Based on this figure, anomalies in trade appear most evident for H Honduras N Nicaragua P Panama OA. Belize, Honduras, El Salvador, and Costa Rica. OB. Belize. OC. Panama and Guatemala. D. No anomalies are evident. % of U.S. trade with Central Am. The Size of Central American Economies and the Value of their Trade with the U.S. 30- 25- 20- 15- 10 at 5- Ив a No Ре Не ES CR 10 15 20 % of Central Am. GDP 25 Go 30 OBTU, draw a diagram to illustrate how the develop- c. As a percent of total exports, rank the states in orda b. Calculate the growth in exports from 2002 to 2012 156 I PART 2 SUPPLY AND DEMAND C. Assuming natural gas prices in Europe are $6.00 per BTU, draw a diagram to illustrate how the develop- ment of a natural gas terminal in the United States will affect supply and demand in the natural gas market for Europe. Explain your findings. d. How will the exporting of natural gas from the United States to Europe affect consumers and pro0- ducers in both places? Note that most of the natural gas in Europe originates from Russia's state-owned natural gas company, Gazprom. Access the Discovering Data exercise for Chapter 5 online to answer the following 3. questions. a. Rank the states in order of exports to China. Rank in order of most to fewest exports. for each state. of most to least exports to Chino
- Consider two neighboring island countries called Contente and Euphoria. They each have 4 million labor hours available per month that they can use to produce corn, jeans, or a combination of both. The following table shows the amount of corn or jeans that can be produced using 1 hour of labor. ols Corn Jeans Country (Bushels per hour of labor) (Pairs per hour of labor) Contente 16 A-Z Euphoria 20 Initially, suppose Contente uses 1 million hours of labor per month to produce corn and 3 million hours per month to produce jeans, while Euphoria uses 3 million hours of labor per month to produce corn and 1 million hours per month to produce jeans. Consequently, Contente produces million bushels of corn and 48 million pairs of jeans, and Euphoria produces 15 million bushels of corn and 20 million pairs of jeans. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of corn and jeans it produces. ▼…ee-trade benefits Ttion to the positive welfare effects that free trade has on an economy, there are a variety of other benefits of international trade ng scenario: Thout free trade, Sapphira has market power as a local producer. Once free trade is implemented in the local economy, Sapphira ger able to raise its prices above competitive levels. vious scer represents which of the following benefits of free trade? D An enhanced flow of ideas Increased variety of goods Increased competition Lower costs through economies of scale Grade It Now SavTOKL LMS Inbox (1) - khalidab.. O WhatsApp C Get Homework Hel.. Article Rewriter Too.. Spinbot.com - Artic.. \Folder - Google Dri.. Which of the following statement is true? * The growing integration of the world economy is increasing the intensity of competition in a wide range of manufacturing and service industries. The growing integration of the world economy is decreasing the intensity of O competition in manufacturing industries and increasing the intensity of competition in services The growing integration of the world economy is increasing the intensity of competition in manufacturing industries and decreasing the intensity of competition in services The growing integration of the world economy is narrowing the scope of competition in a wide range of service, commodity and manufacturing industries Which of the following statement is true? A trade deficit is an economic condition in which a nation imports more than it exports. A trade surplus is an economic condition in which a…
- The countries of Aptonville and Boxtown each produce two goods: Trucks and Motorbikes. The table below lists the yearly production in millions of units associated with producing each good, for each country. Country Production of Trucks Production of Motorbikes Aptonville 80 Boxtown 100 Currently, Aptonville does not trade with Boxtown but the 2 countries are negociating a free trade agreement. Based on the information above, Aptonville should specialize in OTrucks OMotorbikes ONO trade should take place and export to Boxtown. Similarly, Boxtown should specialize in OTrucks OMotorbikes ONo trade should take place and export to Aptonville. 20 50Kawmin is a small country that produces and consumesjelly beans. The world price of jelly beans is$1 per bag, and Kawmin’s domestic demand andsupply for jelly beans are governed by the followingequations:Demand: QD = 8 − PSupply: QS = P,where P is in dollars per bag and Q is in bags of jellybeans.a. Draw a well-labeled graph of the situation inKawminif the nation does not allow trade.Calculatethe following (recalling that the area ofa triangle is ½ × base × height): the equilibriumprice and quantity, consumer surplus, producersurplus, and total surplus.b. Kawmin then opens the market to trade. Drawanother graph to describe the new situation inthe jelly bean market. Calculate the equilibriumprice, quantities of consumption and production,imports, consumer surplus, producer surplus, andtotal surplus.c. After a while, the Czar of Kawmin respondsto the pleas of jelly bean producers by placinga $1 per bag tariff on jelly bean imports. On a graph, show the effects of…(a) With the help of a graph, explain how the quantities of exports and imports of a country canbe determined in a two-country and two-goods world. (b) Explain with the help of a graph theeffect of an increase in the relative price of the exported good of a country on its welfare.
