MacroEconomics Assignment, economics homework help

User Generated

HFRE_ERZBIRQ_YRTNY_744

Economics

Macroeconomics

Kaplan University

Description

I need help on my Macroeconomics Assignment.

Unformatted Attachment Preview

Unit 2 [BU204: Macroeconomics] Unit 2 Assignment 1. Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade between individuals or countries? Is it absolute advantage or comparative advantage? Why? 2. Let us assume two students must prepare a presentation for their marketing class. As part of their class presentation, they must do a series of calculations and prepare 50 PowerPoint slides. It would take Larry 10 hours to do the required calculation and 10 hours to prepare the slides. It would take Kate 12 hours to do the series of the calculations and 20 hours to prepare the PPT slides. A. How much time would it take the two students to complete the project if they divide the two tasks equally? B. How much time would it take the two students to complete the project if they use comparative advantage and specialize in calculating or preparing slides? C. If Larry and Kate have the same opportunity cost of $5 per hour, is there a better solution than for each to specialize in calculating or preparing slides? 3. Let us assume there are only two countries in the world, and the two countries face the following production possibilities frontiers. Further assume that the two countries produce popcorn and peanuts. Country A’s Production Possibilities Frontier Frontier v.6.9.17 Country B’s Production Possibilities 1 of 2 Unit 2 [BU204: Macroeconomics] A. Assume that country A and country B decide to use half of the resources in the production of each good. Indicate the points of the maximum output of each good on the graphs for each country as point A under such resource use. B. Assume the two countries choose autarky and do not trade. What would be the total world production of popcorn and peanuts under the autarky? C. Assume that each country decides to specialize in either popcorn or peanut based on its respective comparative advantage. Under the specialization, what is the total production of popcorn and peanuts? D. Assume country A and B decide to trade 100 units of popcorn for 100 units of peanuts, show on the graphs the gain each country receives from trade. Label these points on the two graphs “B.” 4) Given the table below, graph the demand and supply curves for flashlights. Make certain to label the equilibrium price and equilibrium quantity. Price Quantity Demanded Quantity Supplied Per Month Per Month $5 6,000 10,000 $4 8,000 8,000 $3 10,000 6,000 $2 12,000 4,000 $1 14,000 2,000 a) What are the equilibrium price and the equilibrium quantity? v.6.9.17 2 of 2 Unit 2 [BU204: Macroeconomics] b) Suppose the price is currently $5. What problem would exist in the market? What would you expect to happen to the price? c) Suppose the price is currently $2. What problem would exist in the market? What would you expect to happen to the price? 5) Consider supply and demand for Maine lobsters indicated in the following tables to answers questions from a –d below. Suppose that the supply schedule of Maine lobsters is as follows: Price of Lobster per Pound Maine Quantity of Lobster Supplied (pounds) $25 800 $20 700 $15 600 $10 500 $5 400 First, assume that Maine lobsters can be sold only in the United States. The U.S. demand schedule for Maine lobsters is as follows: v.6.9.17 Price of Lobster per Pound USA Quantity of Lobster Demanded (pounds) $25 200 $20 400 $15 600 $10 800 $5 1,000 3 of 2 Unit 2 [BU204: Macroeconomics] a. Looking at both the schedules of supply and demand, as well as the graph of the demand and supply curve for Maine Lobsters, what is the equilibrium price of lobsters and the equilibrium quantity of lobsters demanded and supplied at that price? b. Second, suppose that Maine lobsters can also be sold in France. The French demand schedule for Maine lobsters is as follows: Price of Lobster per Pound Quantity of Lobster Demanded (pounds) $25 100 $20 300 $15 500 $10 700 $5 900 What is the demand schedule for Maine lobsters now that French consumers can also buy them? c. Using the combined U.S. and French demand schedule, the U.S. demand schedule and the supply schedule, and the graph below, analyze the change in the market for lobsters. What will happen to the price at which fishermen can sell lobster? What will be the final output of lobsters? d. What will happen to the price paid by U.S. consumers? What will happen to the quantity consumed by U.S. consumers? 6) Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced. Obviously, given their limited resources and available technology, as they use more of their resources for potato production, there are fewer resources available for catching fish. Quantity of Potatoes (Pounds) v.6.9.17 Quantity of Fish (Pounds) 4 of 2 Unit 2 [BU204: Macroeconomics] A 1,000 0 B 800 300 C 600 500 D 400 600 E 200 650 F 0 675 Continue to answer the additional questions found on next page v.6.9.17 5 of 2 Unit 2 [BU204: Macroeconomics] Examine the Maximum annual output options table above and the resulting Production Possibility Frontier Graph below and answer questions from a -e. a. Can Atlantis produce 500 pounds of fish and 800 pounds of potatoes? Explain. b. What is the opportunity cost of increasing the annual output of potatoes from 600 to 800 pounds? c. What is the opportunity cost of increasing the annual output of potatoes from 200 to 400 pounds? d. Can you explain why the answers to parts b and c are not the same? e. What does this imply about the slope of the production possibility frontier? v.6.9.17 6 of 2 Unit 2 v.6.9.17 [BU204: Macroeconomics] 7 of 2
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Hi there!Attached is the complete solution in a Word doc.Thanks again!Selenica

Unit 2

[BU204: Macroeconomics]

Unit 2 Assignment
1. Explain the difference between absolute advantage and comparative advantage. Which is
more important in determining trade between individuals or countries? Is it absolute advantage
or comparative advantage? Why?
A country (or business, or individual) possesses an absolute advantage when they are able to
produce a product at a cost using fewer assets than their competitors. That is to say, someone
possessing an absolute advantage may produce an item at a lower per unit cost. Comparative
advantage, on the other hand, focuses less on efficiency (ie, relying on superior technology to
make production cheaper) and more on opportunity cost. An economic actor is said to have
comparative advantage if their opportunity cost for producing a good or service is lower than
that of their competitors.
With respect to which is more important, both are important. It is a matter of what is possible
moreso than what is “important”. If a country cannot compete with superior technology, then
comparative advantage will work to their advantage.
2. Let us assume two students must prepare a presentation for their marketing class. As part of
their class presentation, they must do a series of calculations and prepare 50 PowerPoint
slides. It would take Larry 10 hours to do the required calculation and 10 hours to prepare the
slides. It would take Kate 12 hours to do the series of the calculations and 20 hours to prepare
the PPT slides.
A. How much time would it take the two students to complete the project if they divide the two
tasks equally?
It would require 11 for calculations, and 15 for slide pr...


Anonymous
Excellent! Definitely coming back for more study materials.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags