--%>
Assignment Help - homework help

Domestic opportunity cost of production possibilities tables

Hypothetical production possibilities tables for New Zealand and Spain are given below

639_Hypothetical production possibilities.png

 

Employing a graph, draw the production possibilities data for each of the two countries. Referring to graphs, Find out:

(a) Each country's domestic opportunity cost of generating plums and apples.

(b) Which nation has to specialize in which product.

(c) The trading possibilities lines for each of the nation if the real terms of trade are 1 plum for 2 apples.

(d) Profit after trade.

 

E

Expert

Verified

(a) New Zealand’s cost ratio is 1 plum = 4 apples (or 1 apple = 1/4 plum). Spain’s cost ratio is 1 plum = 1 apple (or 1 apple = 1 plum). Illustrates in the below graphs.

(b) New Zealand has to specialize in apples, Spain in plums.

(c)  The trading possibilities lines for each of the nation if the real terms of trade are 1 plum for 2 apples is described in graph below

(d) Net production before specialization & trade: 40 apples (20 + 20) and 50 plums (10 + 40). After specialization & trade: 60 apples & 60 plums. Gain will be 20 apples and 10 plums.

 

467_Production possibilities data.png

   Related Questions in Finance Basics

  • Q : Primary requirement for JIT inventory

    Describe the primary requirements for a successful JIT inventory control system? For a JIT system to be successful the supplier has to be willing and capable to deliver materials immediately and the quality of delivered materials has to be high.

    		•
  • Q : Recognizes and state the significance

    Normal 0 false false

  • Q : Describe Schedule 7A Schedule 7A : The

    Schedule 7A: The summary version of the State Controller’s Office detailed Schedule 8 position register for each department. The information replicated in this schedule is the base for the “Salaries and Wages Supplement” exhibited on

    		•
  • Q : Effect of change on equilibrium

    Normal 0 false false

  • Q : Revision Order #2 Hello, You folks

    Hello, You folks recently completed an order for me. I'm very impressed and much thanks in advance. I'd like to submit more problems (8 attached) if you can have the same expert work on these please? Some of the #'s were slightly modified from my previous order, so should be easier than starting

    		•
  • Q : Describe difference between business

    Describe difference between business risk and financial risk?Business risk refers to the uncertainty company hold regarding to its operating income (also termed as earnings before interest & taxes or EBIT). Business risk is brought onto sale

    		•
  • Q : Price The Audiology Department at

    The Audiology Department at Randall Clinic offers many services to the clinic’s patients. The three most common , along with cost and utilization data, are as follows: Service Variable cost per service Annual Direct Fixed cost Annual Number of Visits Basic Examination $5. $50,000 3,000 Advanced

    		•
  • Q : Explain the role of a dealer in the OTC

    Normal 0 false false

    		•
  • Q : Describe the sales forecasting procedure

    Describe the sales forecasting procedure.This is a group effort. Usually sales and marketing personnel provide assessments of demand and the competition. Usually, production personnel provide estimates of manufacturing capacity and other product

    		•
  • Q : Externally held public debt and

    Normal 0 false false