Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Country A is a small country that produces an agricultural good (maize) and a manufactured good (gizmos). It takes 12 hours to produce a bushel
Country A is a small country that produces an agricultural good (maize) and a manufactured good (gizmos). It takes 12 hours to produce a bushel of maize and 4 hours to produce a gizmo. Country A workers work 120 million (120M) hours per year. a. b. C. Draw Country A's yearly ppc. (Put gizmos on the horizontal axis.) In autarky, Country A produces (and consumes) 6M bushels of maize. How much labor is allocated to maize production and how much to gizmo production? Show your calculations. In autarky, what is the price of a gizmo (in terms of bushels of maize)? Country A opens to trade with the ROW. The price of a gizmo in the ROW is 0.5 bushels of maize. iy Which good will Country A export? Briefly explain. Add Country A's trade line to your graph in part (a). If Country A now consumes 8M bushels of maize, what are Country A's imports and exports? Give numerical values. (3 points each.) Use the information given above to add points to your graph in part (a) representing ) Country A's production and consumption under autarky. (i) Country A's production with free trade. (1) Country A's consumption with free trade. Does Country A or the ROW gain more from trade? Briefly explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started