1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
valentinak56 [21]
3 years ago
14

Suppose that Portugal and Sweden both produce rye and shoes. Portugal's opportunity cost of producing a pair of shoes is 3 bushe

ls of rye while Sweden's opportunity cost of producing a pair of shoes is 11 bushels of rye.
By comparing the opportunity cost of producing shoes in the two countries, you can tell that

Portugal

Sweden

___________has a comparative advantage in the production of shoes and selector 2

Portugal

Sweden

_____________has a comparative advantage in the production of rye.

Suppose that Portugal and Sweden consider trading shoes and rye with each other. Portugal can gain from specialization and trade as long as it receives more than selector 1

1 bushel

1/11 bushel

1/3 bushel

3 bushels

11 bushels

1/11 bushell

Similarly, Sweden can gain from trade as long as it receives more than _____ of shoes for each bushel of rye it exports to Portugal

1/11 pair

1/3 pair

3 pairs

11 pairs

1 pair

1/11 pair

Answer to the last question, which of the following prices of trade (that is, price of shoes in terms of rye) would allow both Sweden and Portugal to gain from trade? Check all that apply. (TWO OUT OF FOUR APPLY)

7 bushels of rye per pair of shoes

10 bushels of rye per pair of shoes

2 bushels of rye per pair of shoes
1 bushel of rye per pair of shoes in terms of rye) would allow both Sweden and Portugal to gain from trade
Business
1 answer:
Vika [28.1K]3 years ago
7 0

Answer:

  • Portugal : Shoes Opportunity Cost ; Sweden : Rye Opportunity Cost
  • Trade gainful if :  Portugal gets > 3 rye per shoes; Sweden gets > 1/11 shoes per rye
  • Gainful Terms of Trade : '7 ryes per per shoes', 10 ryes per shoes'.

Explanation:

                  Shoes      Rye      Trade off Ratio (Rye:Shoes )

Portugal      1               3            1:3 or 0.33:1       (1/3 = 0.33)

Sweden       1              11            1:11 or 0.09:1     (1/11= 0.09)

Portugal & Sweden have less opportunity cost & hence comparative advantage than each other, in shoes & rye respectively. Portugal will export shoes to Sweden (importer). Sweden will export rye to Portugal (Importer). Trade will be gainful if they get exchange ratio better than domestic exchange ratio - Portugal gets more than 3 ryes per shoes, Sweden gets more than 1/11 shoes per rye.

'2 ryes per shoes' & '1 rye per shoes' : are not gainful trade ratios for Portugal, as it is getting more i.e 3 ryes per shoes at its own domestic ratio.

'7 ryes per per shoes'  is gaining trade ratio for:

  • Portugal: As it gets 7 i.e more than 3 ryes per shoes.
  • Sweden : As it gets 0.14 = (1/7) i.e more than 0.09 ryes per shoes

'10 ryes per shoes' is gaining trade ratio for:

  • Portugal : As it gets 10 i.e more than 3 pairs of ryes per shoes
  • Sweden : As it gets 0.10 = (1/10) i.e more than 0.09 ryes per shoes

You might be interested in
Building an organization capable of good strategy execution entails:
MrMuchimi

Answer:

a. Staffing the organization, building core competencies, and structuring the organization and work effort

Explanation:

Staffing is the management function undertaken with an objective to hire right people for the most suitable job position, and keeping filled organizational positions throughout.

A core competency refers to those unique capabilities an organization builds over time owing to innovation, creativity or efficient resource management, which yields competitive advantage to the organization. A core competency cannot be easily imitated by the rival firms and provides competitive edge to the firm who possesses it.

Organizational structure would define the hierarchy and define reporting responsibilities of it's employees, the extent of delegation of tasks and the organizational culture.

Thus for an organization to be capable of executing good strategy, the above three are a requisite.

7 0
3 years ago
Read 2 more answers
intangible assets that are acquired from other entities are referred to as purchased intangibles, whereas intangibles that are c
Pavlova-9 [17]

Answer:

Internally developed intangibles

Explanation:

3 0
2 years ago
What are the two most important chemical reactions on earth?
viva [34]
Photosynthesis and respiration 
8 0
3 years ago
When a price floor becomes binding because of the change in the supply of hops, the net effect will be ?
Svet_ta [14]

Price floor is the maximum price in the market.

5 0
3 years ago
Describe how you would apply for a mortgage.
ExtremeBDS [4]

You have to complete a " Mortgage Application", the application will usually ask for a credit report, any credit accounts, amount of income, available funds, credit card balances, and a price range. Once a lender has reviewed your application he/she will decide rather to approve or disapprove your application. If your application is approved you will need to make a down payment. A borrower with good/excellent credit is more likely to be approved for a mortgage. Interest rates will determine how much you will pay monthly. Interest rates can also change while the loan application is being reviewed and processed by the lender.

5 0
3 years ago
Other questions:
  • Suppose you are a T-shirt producer in a market without price controls. You are charging a price that is below the equilibrium pr
    8·2 answers
  • Economists use gross national product to measure
    11·1 answer
  • In a project charter, the _____ describes the project and justifies why the project should be done.
    6·1 answer
  • Like many entrepreneurs, troy smith started sonic as a sole proprietorship, then took on a partner, and eventually offered franc
    11·1 answer
  • Experience in the workplace builds a foundation for becoming an entrepreneur in all the following ways EXCEPT
    13·2 answers
  • Tiffany owns a gift shop that carries clothing and memorabilia of local high school teams as well as
    13·1 answer
  • Bank deposits help the nation’s economy by
    13·2 answers
  • How long do you have to file a complaint with osha ?
    6·1 answer
  • Determine the starting current (LRC)
    8·1 answer
  • Explain the three degrees of inflation
    5·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!