--%>
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 Department of Finance

    Department of Finance (Finance): The Director of Finance functions as the Governor’s chief fiscal policy advisor with the emphasis on financial integrity of the state. Finance is delegated the accountability for preparation of the Governor's Bud

    		•
  • Q : Question based on multiplier Normal 0

    Normal 0 false false

  • Q : Describe Form 9 Form 9 : It is the

    Form 9: It is the request by department for space planning services (example, new or extra space lease extensions, or renewals in non-institutional) and also evaluated by the Department of Finance.

    		•
  • Q : Demand for French euros or a supply of

    Normal 0 false false

    		•
  • Q : Lower for a specified company-the cost

    Normal 0 false false

  • Q : What is Indirect Costs Indirect Costs :

    Indirect Costs: The costs which by their nature can’t be readily related with a particular organization unit or program. Similar to general administrative expenses, indirect costs are dispersed to the organizational unit(s) or programs that bene

    		•
  • Q : Effect of change on equilibrium

    Normal 0 false false

  • Q : For banking services how competitive is

    For banking services how competitive is the market?Along with more than 7,000 banks and thrifts in the U.S., banking is one of the most competitive industries in the world. Assume the following characteristics of the American financial services

    		•
  • Q : What is Fingerprint biometrics

    Fingerprint biometrics has basically three main application ground: Large-scale Automated Finger Imaging System for law enforcement Fraud prevention in entitlement programs Access control for facilities or computers.

  • Q : Define Spot Bill Spot Bill : It is an

    Spot Bill: It is an introduced bill which makes non-substantive modifications in a law, generally with the intent to amend the bill at a later date to comprise substantive law modifications. This procedure gives a means for circumventing the deadline

    		•