--%>
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 : Explain Merit Salary Adjustment Merit

    Merit Salary Adjustment (MSA): The cost factor resultant from the periodic raise in salaries paid to the personnel occupying authorized positions. The personnel usually receive a salary raise of 5 percent per year up to the upper sala

    		•
  • Q : Assignments i want to write final state

    i want to write final state report. My state is Texas. You can use the resources that i attached, also you can use another resources to cover the outlines.

    		•
  • Q : Reimbursement Warrant or Revenue

    Reimbursement Warrant (or Revenue Anticipation Warrant): A warrant which has been sold by the State Controller’s Office, as an outcome of a cash shortage in th

    		•
  • Q : Describe factors cause change in

    Normal 0 false false

    		•
  • Q : Describe significance of excess reserves

    Normal 0 false false

  • Q : Describe sunk cost Describe sunk cost?

    Describe sunk cost? Is it relevant while evaluating a proposed capital budgeting project? Describe. A sunk cost is a cash flow which has already occurred, or that will take place, whether a project is accepted or discarded. It is irrelevant wh

    		•
  • Q : Calculating the location in assessing

    Normal 0 false false

  • Q : Finance Assignment # 4 Can you please

    Can you please Help me with this Assignment the due date is 1/20/14 at 6pm

    		•
  • Q : Explain the term Continuous

    Continuous Appropriation: The constitutional or statutory expenses authorization that is renewed each year without additional legislative action. The amount obtainable might be particular, recurring sum each year; all or a specified part of the procee

    		•
  • Q : Compare and contrast the book value and

    Compare and contrast the book value & liquidation value per share for common stock. Is one method more reliable? Describe.The Book Value of a firm's common stock is found by subtracting the value of the firm's liabilities, and preferred stoc

    		•