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Author Question: Table 2-17One MotorcycleOne GuitarIreland10 hours2.5 hoursScotland9 hours2 hoursRefer to Table 2-17. ... (Read 742 times)

jho37

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Table 2-17

One MotorcycleOne Guitar
Ireland10 hours2.5 hours
Scotland9 hours2 hours

Refer to Table 2-17. This table shows the number of labor hours required to produce a motorcycle and a guitar in Ireland and Scotland.

a.

Assume each country has a total of 2,700 labor hours to devote to the production of the two
goods and draw the production possibilities frontier for each country. Put "Motorcycle" on the horizontal axis and "Guitar" on the vertical axis. Be sure to identify the intercept values on your graphs.

b.

Suppose each country allocates 55% of its labor hours to guitar production and 45% to the
production of motorcycles. Complete Table 2-18 below to show each country's output of the two products.

Table 2-18: Production and Consumption with no Trade

Motorcycle OutputGuitar Output
Ireland
Scotland
Total

c.

If the two countries do not trade and consume whatever they produce, identify the current
production and consumption point for each country on their respective production possibilities frontiers. Label Ireland's consumption point "I" and Scotland's consumption point "S".

d.

Suppose the two countries specialize and trade. Which country should produce motorcycles
and which should produce guitars? Explain your answer.

e.

Complete Table 2-19 below to show each country's output with specialization.


Table 2-19: Output with Specialization

Motorcycle OutputGuitar Output
Ireland
Scotland
Total

f.

Did specialization increase the combined output for the two countries without any increase in resources? If so, by how much?

g.

Suppose Ireland and Scotland agree to trade so that in exchange for 600 guitars, the exporter of
guitars receives 140 motorcycles. Complete Table 2-20 below to show each country's consumption bundle after trade.


Table 2-20: Consumption with Trade

Motorcycles Guitars
Ireland
Scotland

h.

Show the consumption points after trade on each country's production possibilities frontier. Label these points "X" for Ireland and "Y" for Scotland.

i.

Has trade made the two countries better off? Explain your answer.
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Marked as best answer by jho37 on Oct 5, 2019

medine

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Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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