a. If the economy produced efficiently 150 units of x and the international price of x were 4y per x, it would specialise in x and produce 200 units of it;

b. If the economy produced efficiently 380 units of y and the international price of x were ½ y per x, it would specialise in x and produce 200 units of it;

c. If the economy produced efficiently 150 units of x and the international price of x were 4y per x, it would specialise in y and produce 400 units of it;

d. If the economy produced efficiently 100 units of x and the international price of x were 2y per x, it would specialise in y and produce 400 units of it;

1.1 In country A, there are 100 workers and each can produce 7 units of X or 10 units of Y. In country B, there are 1000 workers, and each can produce 3 units of X or 4 units of Y. It can be said that:

a) Country A has an absolute advantage in both X and Y but they both could benefit from trade if A specializes in Y and B specializes in X

b) Country A has an absolute advantage in both X and Y but they both could benefit from trade if A specializes in X and B specializes in Y

c) Country B has an absolute advantage in both X and Y but they both could benefit from trade if A specializes in X and B specializes in Y

d) Country B has an absolute advantage in both X and Y, and therefore couldn't benefit from trade with country A

1.2 Citizens of Eldorado produce X and Y with labor and capital. One unit of X requires 1 unit of labor and 2 units of capital. One unit of Y requires 2 units of labor and 1 unit of capital. There are 300 units of labor and 300 units of capital available. If the relative price of X in the world equals pX/pY = 1/2...

a) Eldorado won't engage in international trade, since the opportunity costs of X when producing it and when buying it are the same

b) If Eldoradians consumed 120 units of X before the trade, they will engage in international trade, and fully specialize in Y

c) If Eldoradians consumed 115 units of Y before the trade, they wouldn't benefit from international trade

d) If Eldoradians consumed 100 units of X before the trade, they will engage in international trade, but won't necessarily fully specialize in Y

In the country of Nonconvexia, goods X and Y are produced from the only available input - labor. Suppose the technology of production for X has constant returns to scale, and the technology of production for Y has increasing returns to scale. If Nonconvexia had access to the world markets for X and Y, it would always completely specialize in either X or Y. True or false? False

1) An allocation which is on the production possibility frontier necessarily means:

(a) That it is both productively and allocatively efficient;

(b) That all means of production are necessarily fully employed;

(c) That it is productively efficient;

(d) That it is Pareto efficient.

In country A, there are 100 units of labor (the only means of production).

One unit of labor can produce 1 unit of X or 2 units of Y. Additionally, good Y

has to be stored, and storage capacity for it is limited to 150 units. If the world

price ratio PX/PY equals α…

a) If α = 2, some of the labor force may remain unused

b) If 0 < α < 2, some of the labor force will remain unused

c) If 0 < α < 2, some of the storage facilities will remain unused

d) If α = 2, some of the storage facilities may remain unused

A country can produce x and y using either skilled or unskilled labor. A unit of skilled labor can produce 4 units of x or 2

units of y. A unit of unskilled labor can produce 1 unit of x and 2 units of y. There are 100 skilled workers and 200

unskilled workers. If the relative price of x (px/py) in the world market is 4…

a. Some skilled labor will remain unused

b. Some unskilled labor will remain unused

c. The country will only consume y

d. The country will produce 600 units of x

Date: 2015-12-18; view: 926