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Homework answers / question archive / 1) Consider the following information regarding the production possibilities of France and Germany
1)
Consider the following information regarding the production possibilities of France and Germany. You may assume that both countries face constant opportunity costs.
|
France |
Germany |
||
|
Crepes |
Sausages |
Crepes |
Sausages |
|
20 |
0 |
24 |
0 |
|
10 |
8 |
12 |
18 |
|
0 |
16 |
0 |
36 |
You may assume that each of these production plans is efficient, and that both countries face constant opportunity costs. Suppose that, after specialization and trade, the final allocation of goods is as follows.
France: 4 Crepes and 16 Sausages, Germany: 16 Crepes and 20 Sausages
At what rate are the two countries trading Crepes for Sausages?
|
1 Crepe per Sausage. |
||
|
4 Crepes per Sausage. |
||
|
5/4 Crepe per Sausage. |
||
|
4/5 Crepe per Sausage. |
2)
Find and Calculate (using the table below)
1. Consumption:
2. Investment:
3. Government:
4. Exports:
5. Imports:
6. GDP:
7. Total income:
Wages Clothing purchases French wine consumed in the U.S. Increases in inventories New factories built Food production Corporate profits Spending on public eduction Rent Existing houses sold to new owners Autos produced in the U.S., sold abroad Employee benefits $4.5 trillion $1.0 trillion $0.6 trillion $0.2 trillion $1.1 trillion $1.2 trillion $0.6 trillion $1.5 trillion $0.4 trillion $2.0 trillion $0.5 trillion $0.4 trillion
3) Consider a commodity (e.g. coffee) and show how equilibrium price and quantity traded are determined. Discuss the causes of demand and supply shifts and their implications for equilibrium price and quantity traded. Use appropriate diagram(s) to illustrate and explain your answer.
1)
Answer is A. 1 Crepe per Sausage.
Because after specialization France will make 20 Crepes and Germany will make 36 Sausage.
And France gaves 16 Crepe to Germany and Germany gave 16 Sausage to France.
So Trade takes place for Crepe for 1 Sausage.
2)
Hi,
Hope you are doing well!
Question:
Answer:
1. Consumption:
Clothing purchase = $1.0 trillion
French wine consume in the US. = 0.6 trillion
Total consumption = 1 + 0.6 = $1.6 trillion
Consumption is consisting of private (household final consumption expenditure) in the economy.
2. Investment:
Increase in inventories = $0.2 trillion
New factories built = $1.1 trillion
Total Investment = 1.1 + 0.2 = $1.3 trillion
Investment refers to the amount invested in purchase or construction of new capital goods.
3. Government:
Spending on public education = $1.5 trillion
4. Exports:
$0.5 trillion
5. Imports:
Not available
6. GDP:
It is the monetary value of the the finished goods and services produced during a period within the country.
GDP = Consumption + Investment + Government spending + Net export (export -import).
= $1.6 trillion + $1.3 trillion + $1.5 trillion + $0.5 trillion = $4.9 trillion
7. Total income:
Total Income = Wages + Corporate profit + Rent + Employee benefits
= $4.5 + 0.6 + 0.4 + 0.4 = $5.9 trillion
3)Please use this google drive link to download the answer file.
https://drive.google.com/file/d/1J47B3DCik761RwNry2IcvO0HBNYMZBr3/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
