Problem set 1 Spring 2007

Problem set 1 - Name 1 Problem Set#1(due Thursday 2/8 Consider the following production possibilities for the Swiss and German economies

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Name: ________________________________ Problem Set #1 (due Thursday, 2/8) Page 1 of 3 1. Consider the following production possibilities for the Swiss and German economies Switzerland Germany Clocks (millions) Chocolates (millions of tons) Clocks (millions) Chocolates (millions of tons) 4 0 12 0 2 5 6 3 0 10 0 6 a. In Switzerland , what is the opportunity cost of producing one more clock in terms of chocolates? b. In Germany , what is the opportunity cost of producing one more clock in terms of chocolates? c. Draw the production possibility curve (PPC) for Switzerland and for Germany in the graph below with a solid line ‘—’. Make sure to label each curve as ‘Swiss PPC’ or ‘German PPC’ 0 2 4 6 8 10 12 14 0 2 4 6 8 1 01 21 4 chocolates (millions) clocks (millions)
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Page 2 of 3 d. If each country specializes in the good in which it has a comparative advantage, show the consumption possibilities from trade in the graph above. Make sure to indicate the consumption possibilities with a dashed ‘----’ line.
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This homework help was uploaded on 04/18/2008 for the course ECON 100 taught by Professor Kasilwal during the Spring '07 term at CSU Long Beach.

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Problem set 1 - Name 1 Problem Set#1(due Thursday 2/8 Consider the following production possibilities for the Swiss and German economies

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