Supply and Demand

ANSWERS TO EXAM I Part I. A role impostor in Norway feces arrive at a come back of 10 lashings of tip per daylight and 5 dozens of aluminium per day. A player in India rat relegate 4 scores of seek per day and 1 long ton of atomic number 13 per day. Assume the player can amaze goods fiver days/ workweek. a. (3 pts) Would a worker in Norway choose to find 30 lots of slant per and 20 slews of atomic number 13 per week? Explain. No. 30 wads of tilt would fatigue three days to throw and 20 tons of aluminium would require four-spot days. Norway except has five days/week to produce goods. The conspiracy is outside its production possibilities frontier. b. (3pts) Would a worker in India choose to produce six tons of lean and four tons of aluminium per week? Explain. No. quadruplet tons of atomic number 13 would require four days. In the fifth day, India can still produce four tons of fish. The combination is outside its produ ction possibilities frontier c. (3 pts) Which rustic has the absolute improvement in fish? In aluminum? Explain. Norway has the absolute vantage in fish because it can produce 10 tons of fish per day whereas India can nevertheless produce four tons/day. Norway has the absolute advantage in aluminum because it can produce 5 tons/day whereas India can only produce one ton/day. d.

(3 pts) If India offered to mickle two tons of aluminum to Norway in exchange for 10 tons of fish, would Norway subscribe? Explain. No. The opportunity exist of separately(prenominal) ton of aluminum in Norway is two tons o f fish. It would not be allowing to set! apart more than four tons of fish for two tons of aluminum. e. (3pts) Provide terms of trade for one ton of aluminum that would be acceptable to each(prenominal) country. Be sure to expose which country will produce fish and which country will produce aluminum. The opportunity address of one ton of aluminum in Norway is two tons of fish. Hence, it would require at least(prenominal) two tons of fish in exchange for each ton of aluminum. The opportunity cost of one ton of aluminum in India is four tons of fish. Hence, it would...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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