The PPF between avocados and bananas for Ecuador (PPFE) and…
The PPF between avocados and bananas for Ecuador (PPFE) and Mexico (PPFM) is depicted below. Each PPF demonstrates the productive capabilities of each country with respect to these two goods. Part (i): Identify the opportunity cost of producing an additional unit of each good in Ecuador. Clearly indicate which opportunity cost refers to each good. Part (ii): Identify the opportunity cost of producing an additional unit of each good in Mexico. Clearly indicate which opportunity cost refers to each good. Part (iii): Which country has a comparative advantage in producing avocados? Which country has a comparative advantage in producing bananas? Part (iv): Suppose that the unit-labor requirement for producing an additional avocado is aA=0.08 in Mexico. How many units of labor are available in Mexico? Part (v): If the unit-labor requirement for producing an additional avocado is aA=0.08 in Mexico, what must be the unit-labor requirement for producing an additional banana in Mexico? Hint: Answering this question is made easier by using some of your previous calculations.
Read DetailsBelow, you are provided with the firm-level demand, marginal…
Below, you are provided with the firm-level demand, marginal revenue, and relevant cost curves for a large pick-up truck producer. Suppose, initially, that this graph depicts the scenario in which pick-up trucks are not traded internationally. Part (i): Suppose that the United States does not trade pick-up trucks internationally. Identify the profit-maximizing number of trucks that this firm will sell each week, and the per-truck price that it charges. Part (ii): Suppose that the United States begins to trade pick-up trucks internationally. How would this affect this firms production of trucks assuming it remains in the market?
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