answerspracticequestions1spring2004

answerspracticequestions1spring2004 - the 25 square yards...

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Econ 102 Spring 2004 Answers to Practice Questions 1 P1. 1. Fish Oil Britain 4 tons 12 tons Norway 2 tons 4 tons 2. 3 tons of oil. 3. 2 tons of oil. 4. Britain. 5. Norway. 6. It will go up by 1 ton. P2. c). P3. 8 bushels of wheat. Why? Because increasing the production of beef from 1.75 to 2 pounds will require a reduction of at least 2 bushels of wheat. If an increase of 0.25 pounds of beef requires a 2 bushel reduction of wheat, then an increase of 1 ton of beef will require a reduction of 8 bushels of wheat. P4. c. P5. b. P6. a. P7. d. P8. a) No. Sarah will specialize in washing windows. Her opportunity cost of washing windows is raking 3/2 sq. yards of leaves whereas James’ opportunity cost is 5/3 sq. yards of leaves. b) Sarah will take 3 hours washing the 12 windows. James will take 5 hours raking
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Unformatted text preview: the 25 square yards of leaves. Therefore, the best strategy for them is to specialize and when Sarah is done with the windows, both will finish the raking task. This strategy requires 3 hours and 54.5 minutes. (We are assuming constant returns to scale in this task). P9. In England In Portugal Cloth 8 yards 12 yards Wine 2 barrels 6 barrels a) 4 yards of cloth. b) 2 yards of cloth. c) Portugal has the absolute advantage in the production of both goods, and comparative advantage in wine. England has the comparative advantage in cloth. d) England will specialize in cloth and export it to Portugal, which in turn will export wine. e) It will be somewhere between 2 and 4 yards of cloth....
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This note was uploaded on 08/08/2008 for the course ECON 102 taught by Professor Drozd during the Spring '08 term at Wisconsin.

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answerspracticequestions1spring2004 - the 25 square yards...

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