1 Suppose that in a year an American worker can produce 60 s

1)

Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country.

If these countries were open to trade, (A)China B)the United States ). would export shirts and (A)both countries B)only the United States C)only China )would benefit from trade.

The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countries better off is

A)2

B)5

C)12

D) 30

shirts per computer, and the lowest price that makes both countries better off is A)2 B)5 C)12 D)60 shirts per computer.

3. Suppose that China catches up with American productivity so that a Chinese worker can produce 60shirts or 30 computers.

True or False: There are no longer gains from trade.

Valerie and Caroline are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Valerie takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Caroline takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza.

Valerie\'s opportunity cost of making a pizza is (2/3 gallon,5/7gallon,1 1/2 gallons,1 2/5 gallons) of root beer, and Caroline\'s opportunity cost of making a pizza is (2/3 gallon,5/7gallon,1 1/2 gallons,1 2/5 gallons) of root beer.

( Valerie ,Caroline ) has an absolute advantage in making pizza, and (Valerie ,Caroline) has a comparative advantage in making pizza.

If Valerie and Caroline trade foods with each other, (Valerie ,Caroline) will trade away pizza in exchange for root beer.

The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is (2/3 gallon,5/7gallon,1 1/2 gallons,1 2/5 gallons)? of root beer, and the lowest price that makes both roommates better off is (2/3 gallon,5/7gallon,1 1/2 gallons,1 2/5 gallons)? of root beer per pizza.

Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts or 10 computers. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China 30 27 24 21 18 O 15 12 U.S. PPF China PPF U.S. without Trade 6 3 0 China without Trade 0 10 20 30 40 50 60 70 80 90 100 Quantity of Shirts

Solution

Can answer only 4 parts according to Chegg policy

¹ China because it has lower OPPUTUNITY cost of 12/60

2 both the countries

3 60/12=5

4 60/30=2

5 True because both have same OPPUTUNITY costs