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1.Calibri 11 BIVA. A E A 400 B 300 | A 100 - -- - 1 - E ? ? 500 ID 600 0 Y a) What kind of trade-offs, if any, does this country face if it decides to move from E to F? briefly explain your answer in no more than 3 sentences.
JJ, uny, uves Liis County ide if it decides to move from E to F? briefly explain your answer in no more than 3 sentences. b) Along the B and D PPF, what is the opportunity cost of producing one extra unit of Y? Briefly explain and enter any value you might have calculated to reach your conclusion. Is the opportunity cost constant? 2 > BIU "86263" "86263
Home Insert Draw Layout Review View Calibri 11 ? ? ? A. E e A 2. (5 points) The number of workers needed to produce a kilo of fish and chicken for Country A and Country B are given in the box below. Number of workers needed to produce ONE Kilo of Kilo of Fish Chicken 5 10 Country A Country B 20 25 a. Given 100 workers, enter the value of the intercepts country A's PPF and Country B's PPF. B and Villa percent
b. Given the information in the box above which country should specialize producing fish and who should specialize producing chicken? Briefly explain why in no more than 3 sentences. Feel free to enter the values of any calculation you have made to reach this conclusion. Villa and Β Ι Ο percent.
2.1. Make 1 example of the linear demand function and the supply linear function. Identify the elements that exist in this function.
2. State the conditions of equilibrium and calculate the equilibrium solution of the function.
3. Describe the equilibrium condition on a graph.
3.Describe how changes in expected inflation impact an economy in the wake of a temporary negative supply shock.
4.Answer the following questions based on the given data. (EXPENDITURE APPROACH)
Components
RM (million)
Export
500
Personal consumption expenditure
1400
Changes in stock
-40
Indirect business tax
30
Government expenditure
990
Investment
1000
Personal income tax
80
Subsidies
50
Imports
400
Factor Income paid abroad
80
Depreciation
40
Factor Income received from abroad
90
Calculate:
i.Gross Domestic Product at market price
ii-Gross Domestic Product at factor cost
iii-Gross National Product at factor cost
iv- National income
5.Economists disagree on the reasons fro IPP, in one view, it is an instrument of competition between domestic and international, what is the second view adopted economists and what is their option about price collusion
1.We see that the two points are on different PPFs hence there's no trade-off to go from point E to F. The country would need to increase its productivity to move to the higher PPF if it wants to move from point E to point F.
b) Point B represents 400 units of product X and 0 of Y, and point D represents 0 units of product X and 600 of Y. The overall cost ratio is 1.5 units of Y to produce 1 unit of X, but it changes gradually from perhaps less than 1 of Y for each incremental unit of X, to more than 1.5 units of Y for each incremental unit of X, as we move from point D to B.
c) Pls see table below
| Workers needed for 1 kg | 100 Workers can produce kg | |||
| Fish | Chicken | Fish | Chicken | |
| Country A | 5 | 10 | 20 | 10 |
| Country B | 20 | 25 | 5 | 4 |
The numbers in the last two columns represent the intercept. For instance, if country A uses all its 100 workers to produce fish, it gets 20 kg of fish and 0 of chicken, and so on.
d) We need to look at the cost of producing in terms of foregoing the other product for each country. Pls see the table below, which has two more columns added to the table above
| Workers needed for 1 kg | 100 Workers can produce kg | Cost ratio | ||||
| Fish | Chicken | Fish | Chicken | Chicken / Fish | Fish / Chicken | |
| Country A | 5 | 10 | 20 | 10 | 0.5 | 2 |
| Country B | 20 | 25 | 5 | 4 | 0.8 | 1.25 |
We see that country A has to forego less of chicken to produce one unit of fish (0.5 vs. 0.8) as compared to country B, and it will specialize in production of fish.Similarly, country B has to forego less of fish to produce one unit of chicken (1.25 vs. 2) and hence it will specialize in production of chicken.
2.Please use this google drive link to download the answer file.
answer 2.https://drive.google.com/file/d/19y8dOo5ZGcJ0ZcHJ-1EHvOBGbnxMVU3c/view?usp=sharing
answer 3.https://drive.google.com/file/d/126UMqmaG0J5cvdspyYnkzk3cLOdgJFuA/view?usp=sharing
Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process.
https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link
3.
SOLUTION:
As there is expected inflation, it will cause a slight decrease in demand.
And, as there is a negative supply shock, it will cause a huge decrease in supply.
Here, both demand and supply curves shifts to the left, causing a decrease in quantity and increase in price.
DIAGRAMATIC REPRESENTATION :
4.GDP at market price = Consumption + Government expenditure + Investment + Exports - Imports = 1,400 + 990 + 1,000 + 500 - 400 = 3,490
GDP at factor cost = GDP at market price - Indirect business tax + Subsidies = 3,490 - 30 + 50 = 3,510
GNP at factor cost = GDP at factor cost + Net national income from abroad - Factor income paid abroad = 3,510 + 90 - 80 = 3,520
NNP at factor cost or National Income = GNP at factor cost - Depreciation = 3,520 - 40 = 3,480
5.IPP stand for Import Parity Pricing.
Parity pricing is a method used to compare prices of import or export in one country with that in another country. Using this method, prices of a good across borders are brought at par with each other.
In case of IPP, price of a commodity in one country would be determined on the basis of cost of importing the same commodity in that country. It would include cost, insurance and freight. In this way, a comparison is facilitated as to whether the commodity should be imported or produced/procured locally. If IPP is lower than domestic price, then it will beneficial for trader to import that commodity.
Regarding IPP, one view is that it is a competitive instrument while the other view is that it is a source of market power. Market power can be gained by domestic supplier if the market of the commodity is imperfectly competitive and prices remain equal to IPP owing to price collusion and domestic supplier is making profits at IPP. If the domestic supplier is not making any economic profit or the market is competitive then there is no fear of supplier gaining market power.
