Question
only need help with 22 to 27 Given the labor productivity and labor endowments of Alphania and BETANIA, answer questions 11 - 22. Alphania BETANIA
only need help with 22 to 27
Given the labor productivity and labor endowments of Alphania and BETANIA, answer questions 11 - 22.
Alphania | BETANIA | ||
Labor Force | 500 | 300 | |
Output(tons)/worker | |||
cloth | 6 | 8 | |
food | 8 | 40 |
Enter trade. Alphania specializes in CLOTH and BETANIA in FOOD. Suppose that BETANIA exports 2.25 units of food in exchange for one unit of cloth.
11. What is the maximum amount (tons) of cloth that Alphania can produce?
a) 5000
b) 4000
c) 2000
*d) 3000
12. What is the maximum amount (tons) of food that Alphania country can produce?
a) 5000
b) 1200
c) 8000
*d) 4000
13. What is the maximum amount of cloth that BETANIA can produce?
a) 1520
b) 7800
*c) 2400
d) 9000
14. What is the maximum amount of food that BETANIA can produce?
a) 7800
b) 2400
c) 15200
*d) 12000
15. What is the cost of a unit of cloth in Alphania?
a) 2 of food
b) 2.5 of food
c) 3 of food
*d) 1.33 of food
16. What is the cost of a unit of cloth in BETANIA?
a) 12 of food
*b) 5 of food
c) 3 of food
d) 10 of food
17. How much cloth could Alphania produce and consume, if it employs 150 units of labor in the cloth industry?
a) 400
b) 500
*c) 900
d) 700
18. In that case, how much food could Alphania produce and consume?
*a) 2800
b) 2666
c) 1500
d) 900
19. How much cloth could BETANIA produce and consume, if it employs 150 units of labor in the cloth industry?
a) 1550
*b) 1200
c) 1760
d) 1800
20. In that case, how much food could BETANIA produce and consume?
a) 6800
b) 7200
*c) 6000
d) 7000
21. How much cloth could BETANIA receive in exchange for 3,375 units of food at the proposed terms of trade?
answer: 1500
22. At the proposed terms of trade, how much more food will Alphania be able to consume as compared to the autarky case in # 18 above?
answer: 20.54%
23. At the proposed terms of trade, how much more cloth will Alphania be able to consume as compared to the autarky case in # 17 above?
ANs: 66.67%
24. At the proposed terms of trade, how much more food will BETANIA be able to consume as compared to the autarky case in # 20 above?
Ans: 43.75%
25. At the proposed terms of trade, how much more cloth will BETANIA be able to consume as compared to the autarky case in # 19 above?
answer: 25%
26. Suppose that the cloth industry in BETANIA asks for protection from unfair foreign competition, and the government levies a tariff of three units of cloth on Alphania. How many units of cloth would Alphania have to surrender for every 2.25 units of food that it imports?
answer: 4
27. As a result of the tariff, BETANIAs residents will be better-off, but Alphanias residents will be worse-off.
b) FALSE
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