lleryTwo countries namely the United States and the United Kingdom can produce both wheatand whiskey. Their production possibility frontiers are shown below. Based on this one cansay thatWheat (millions ofbushels)United States15001000 Whiskey(millions ofbottles)Wheat (millions ofbushels)100UnitedKingdom500Whiskey(millions ofbottles)ntireO Both countries would gain if the United States produced both wheat and whiskey, and UnitedKingdom produced only whiskey and they traded.O Both countries will get the most desired outcome if each produced both wheat and whiskey, and theytraded in both wheat and whiskey.O Both countries would gain if United States produced only whiskey and United Kingdom produced bothwheat and whiskey and they traded.O Both countries would gain if the United States specialized in producing wheat, and United Kingdomproduced only whiskey and they traded.O United States has an absolute advantage in producing both wheat and whiskey, and thus would notgain by trading with the United Kingdom.

To explain why:Comparative Advantage: The notion of comparative advantage argues that a country…

Answered: llery Two countries namely the United…

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains Rrom Trade

Section: Chapter Questions

Problem 9PA

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With its existing resources Country A can produce either 500 million bushels of wheat or 40 million cars. They are presently not engaged in trade and are choosing to produce and consume 375 million bushels of wheat and 10 million cars. The country decides to completely specialize in wheat production. They trade 100 million bushels of wheat in exchange for 12 million cars. After trade they can consume million more bushels of wheat and million more cars than they could before trade?
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Brazil can produce 100 pounds of beef or 10 autos. In contrast the United States can produce 40 pounds of beef or 30 autos. Which country has the absolute advantage in beef? Which country has the absolute advantage in producingautos?WhatistheopportunitycostofproducingonepoundofbeefinBrazil?Whatistheopportunitycost of producing one pound of beef in the United States?
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A Moving to another question will save this response. Question 13 Pheef A B D D What could this graph be used to illustrate? O a. The welfare benefits when a country imports a good. O b. How to apply the Big Mac index to the trade model. O c. The welfare effects of a tariff. O d. The welfare benefits when a country exports a good. A Moving to another question will save this response. S Q beef WORLD PRICE
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Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade. Select one OA Belarus should export linen to Russia. Ob Russia should export linen to Belarus. trading linen would provide no net advantage to either country Od Without additional information about opportunity costs, this question cannot be answered. 2012 Hauton Community College 2100 Man Street Hounton, TX 77002 711718.2000

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