100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Class Activity - Chapter 3 $4.99
Add to cart

Class notes

Class Activity - Chapter 3

 0 purchase

Chapter 3, see notes in the full note document, this is the class activity that goes alongside the notes.

Preview 1 out of 3  pages

  • January 29, 2025
  • 3
  • 2023/2024
  • Class notes
  • Professor ali
  • Chapter 3
All documents for this subject (8)
avatar-seller
kasnyd06
ECN 101
Class Activity
Chapter 3
Prof. Ali



Answer the following questions.

Chapter 3: Interdependence and gain from trade

1. Assume that England and Spain produce cheese and bread. The table below shows the
amount of each good that the countries can produce in one hour .


Amounts of goods produced in one hour

Cheese Bread
England 40 (10/40=.25) 10 (40/10=4)
Spain 10 (80/10= 8) 80 (10/80=.125)
The calculations are to find the opportunity cost

Comparative Production= the number that is smaller
Cheese = .25 vs. 8
.25 is lower so England has the comparative production

a. Who has a comparative advantage in the production of cheese?
England
b. Who has a comparative advantage in the production of bread?
Spain
c. Which country should be exporting chees and which country should be exporting
bread based on the theory of comparative advangate? Explain your answer.
England should be exporting Cheese
Spain should be exporting Bread


Assume that both countries each has 100 hours available for production. Originally,
when there is no trade, each country divided its time equally between the production of
cheese and bread. Now, each country spends all its time producing the good in which it
has a comparative advantage.
d. By how much will the production of cheese increase as a result of trade?
England ( 40x100) = 400 cheeses
e. By how much will the production of bread increase as a result of trade?

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller kasnyd06. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $4.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

69411 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$4.99
  • (0)
Add to cart
Added