Chapter questions - Assignment Example

Unit Chapter Questions Chapter 20 Question 2 Beef Autos Brazil 100 10 U.S 40 30 Ai = , where Ai is the amount offoregone product (B) it will cost to produce (A).B is the amount foregone product you can produce and Aii is the amount of the product you can producea) Brazil has absolute advantage in producing beef.b) U.S has an absolute advantage in producing autos.c) Brazil can produce 100 pound of beef or 10 autos. Opportunity cost of one pound of beef = 0.1 autos ( d) U. S can produce 40 pounds of beef or 30 autos.

Opportunity cost of producing one pound of beef = = 0.75 autos.Question 22a) Assign vacuuming to roommates as you are 70% faster with dishes and 10% faster in vacuuming.b) Roommates may leave all the work to you since you are faster. They may use every opportunity to get the dishes dirty as you are faster in cleaning so they see no big deal. Misunderstandings may also arise because of the free time you have compared to their slower rate. c) A trade related analogy to this problem is where two firms, A & B exist who produces homogenous products.

Firm A might realize that it is 70% faster in production but 10% faster in sales than their firm B counterparts.Chapter 21Question 3Trade barriers save jobs in protected industries but only by costing jobs in other industries in the following ways:Trade barrier is a form of protection by the government against importing goods and services from other countries. First, when trade barriers are imposed on capital or producer goods, some industries gain because they are then able to produce them locally.

These goods are then sold to local industries at higher prices. To counteract this cost, some industries lay off some of their workers.Secondly, when production of some goods are localized there is a cost for geographical mobility of workers to those industrial areas. Some workers are rendered immobile geographically, leading to lose of jobs. Thirdly, relocation and retraining of workers is an expensive cost by some industries. Some people will end up losing their jobs because the cost of retraining their employees is very high.

Question 10 Low income countries like Brazil, Egypt or Vietnam have lower environmental standards than high income countries like the German, Japan or the United States. This is because of several reasons discussed below.First, the low income countries have a problem with sourcing of jobs. Most of the time they intentionally lower their standards especially the environmental standards just to attract multinational countries. This situation forces the low income countries to have lower environmental standards than their counterparts who are high income countries.

Second, Pollution is a problem that cannot only be controlled and maintained within a country. It is usually passed off to neighbouring countries in a region. Low income countries focus more on economic issues and pay little attention to pollution which degrades their environmental standards. High income countries focus on all areas for the purpose of growth and development.Furthermore, low income countries or the developing nations experience a problem know as policy paralysis. They are often struggling to keep up with the pace of other developed countries.

The high income countries take advantage of the fact that they understand the important role that they play in influencing the policies. Whenever the low income countries come up with a policy to raise their environmental or even working standards, the multinational countries threaten to leave.Finally, low income countries have unstable governments which make it difficult to have stable and reliant environmental policies. These instabilities are good excuses for high income countries to control the low income countries and their policies.

Question 57a) Equilibrium price=70 and equilibrium quantity=200. This is because at the price of 70, both quantity demanded and quantity supplied are at 200b) Equilibrium price=90 and equilibrium quantity=400. This is because at the price of 90, both quantity demanded and quantity supplied are at 400c) Supply and demand diagrams, one for each country, in the situation before trade. e) Imposing an antidumping import quota of 30 will not affect either too much.f) Yes it does. An import quota of 70 will affect the producers as prices will have to decrease.

Works CitedRoss, L. W. Economics. London: Longman Publishers, 1997. Print.