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Homework answers / question archive / Bellevue University - BA 333 M1 Competency Assessment According to the author, economists approach economic problems with economic models, and these models will help familiarize you with how economists approach economic problems
Bellevue University - BA 333
M1 Competency Assessment
According to the author, economists approach economic problems with economic models, and these models will help familiarize you with how economists approach economic problems. The models also help explain how individuals and countries gain from trade. Accordingly, trade allows people to specialize in the production of goods and services for which they have comparative advantages and, then trade for goods and services that other people produce based on their comparative advantages.
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?
(see below for questions) 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.
This section deals with the Production Possibility Frontier and market forces of supply and demand models, as well as, the impacts of government policies on the interactions of supply and demand in the market economy.
|
Quantity Demanded Per Month |
Quantity Supplied 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 |
Price |
![]() |
6 |
5 |
5 |
5 |
4 |
4 |
4 |
3 |
3 |
4 |
3 |
2 |
2 |
2 |
Demand |
1 |
1 |
1 |
0 0 |
0 0 0 |
0 |
0 |
2 |
4 |
6 |
8 Quantity |
10 |
12 |
14 |
16 |
18 |
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:
Price of Lobster per Pound |
USA Quantity of Lobster Demanded (pounds) |
$25 |
200 |
$20 |
400 |
$15 |
600 |
$10 |
800 |
$5 |
1,000 |
Price of Lobster per Pound |
Quantity of Lobster Demanded (pounds) |
$25 |
100 |
$20 |
300 |
$15 |
500 |
$10 |
700 |
$5 |
900 |
Year |
Quantity of Potatoes (Pounds) |
Quantity of Fish (Pounds) |
A |
1,000 |
0 |
B |
800 |
300 |
C |
600 |
500 |
D |
400 |
600 |
E |
200 |
650 |
F |
0 |
675 |
Examine the Maximum annual output options table above and the resulting Production Possibility Frontier Graph below and answer questions from a-e.
Now that you have segmented the components of the changes in supply and demand and the ability to meet demand, explain how the current status of the supply will meet the changing demand for the products, and the change in the production possibilities will be able to meet the market demand.
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