Author Question: Table 2-12 Refer to Table 2-12.This table shows the number of labor hours required to produce a cell ... (Read 346 times)

Chelseaamend · **on:** Mar 15, 2019

Table 2-12

Refer to Table 2-12. This table shows the number of labor hours required to produce a cell phone and a board foot of lumber in Estonia and Finland.

a. If each country has a total of 3,600 labor hours to devote to the production of the two goods, draw the production possibilities frontier for each country. Put "Cell Phone" on the horizontal axis and "Lumber" on the vertical axis. Be sure to identify the intercept values on your graphs.

b. Suppose each country allocates 55% its labor hours to lumber production and 45% to the production of cell phones. Complete Table 2-13 below to show each country's output of the two products.

Table 2-13: Production and Consumption with no Trade

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 Estonia's consumption point "
E" and Finland's consumption point, "
F."

d. Suppose the two countries specialize and trade. Who should produce cell phones and who should produce lumber? Explain your answer.

e. Complete Table 2-14 below to show each country's output with specialization.

Table 2-14: Output with Specialization

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

g. Suppose Estonia and Finland agree to trade so that in exchange for 400 board feet of lumber, the exporter of lumber receives 90 cell phones. Complete Table 2-15 below to show each country's consumption bundle after trade.

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

i. Has trade made the two countries better off? Explain your answer.

mochi09 · **Reply #1 on:** Mar 15, 2019

A FREE account is required to view all solutions!

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.

Answer Preview

Only 29% of students answer this correctly