Business, 11.09.2019 00:20 iBrain

Suppose there are two states that do not trade: iowa and nebraska. each state produces the same two goods: corn and wheat. for iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. for nebraska the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat. at present, iowa produces 20 million bushels of wheat and 120 million bushels of corn, while nebraska produces 20 million bushels of corn and 120 million bushels of wheat.

explain how, with trade, nebraska can end up with 40 million bushels of wheat and 120 million bushels of corn while iowa can end up with 40 million bushels of corn and 120 million bushels of wheat.

Answers: 2

Show answers

Answers

Answer from: gigi6653

Explanation:

Iowa's opportunity cost of producing 1 bushel of wheat is

= 3 bushels of corn

Nebraska's opportunity cost of producing 1 bushel of wheat is

= $\frac{1}{3}$

= 0.33 bushels of corn

Iowa's opportunity cost of producing 1 bushel of corn is

= $\frac{1}{3}$

= 0.33 bushels of wheat

Nebraska the opportunity cost of producing 1 bushel of corn is

= 3 bushels of wheat

Nebraska has a comparative advantage in producing wheat and Iowa has a comparative advantage in producing corn.

If both countries start to produce the commodity they have a comparative advantage in producing, both will gain from trade.

Iowa can give up producing 20 million bushels of wheat and instead produce additional

= 20 × 3 = 60 million bushels of corn

Similarly, Nebraska can give up producing 20 million bushels of corn and instead produce additional

= 20 × 3 = 60 million bushels of wheat

So now Iowa can produce 180 million bushels of corn no wheat and Nebraska can produce 180 million bushels of wheat and no corn.

If they trade, Nebraska can trade 120 million bushels of wheat for 60 bushels of corn. With this trade, Nebraska will end up with 120 million bushels of corn and 60 million bushels of wheat and Iowa will end up with 60 million bushels of corn and 120 million bushels of wheat.

Answer from: Quest

Bi would !

Answer from: Quest

apex verified answer < 3

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : doubling a recipe and figuring out how many cups of paint to use are both examples of using math skills : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :

i really hope this this is the correct answer < 3 < 3 < 3

Another question on Business

Business, 22.06.2019 08:00

Suppose that xtel currently is selling at $40 per share. you buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. the rate on the margin loan is 8%. a. what is the percentage increase in the net worth of your brokerage account if the price of xtel immediately changes to (a) $44; (b) $40; (c) $36? (leave no cells blank - be certain to enter "0" wherever required. negative values should be indicated by a minus sign. round your answers to 2 decimal places.) b. if the maintenance margin is 25%, how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.) c. how would your answer to requirement 2 would change if you had financed the initial purchase with only $10,000 of your own money? (round your answer to 2 decimal places.) d. what is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if xtel is selling after one year at (a) $44; (b) $40; (c) $36? (negative values should be indicated by a minus sign. round your answers to 2 decimal places.) e. continue to assume that a year has passed. how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.)

Answers: 1

Answer

Business, 22.06.2019 09:30

What are two benefits of consumer programs

Answers: 2

Answer

Business, 22.06.2019 09:40

Microsoft's stock price peaked at 6118% of its ipo price more than 13 years after the ipo suppose that $10,000 invested in microsoft at its ipo price had been worth $600,000 (6000% of the ipo price) after exactly 13 years. what interest rate, compounded annually, does this represent? (round your answer to two decimal places.)

Answers: 1

Answer

Business, 22.06.2019 10:10

conquest, inc. produces a special kind of light-weight, recreational vehicle that has a unique design. it allows the company to follow a cost-plus pricing strategy. it has $9,000,000 of average assets, and the desired profit is a 10% return on assets. assume all products produced are sold. additional data are as follows: sales volume 1000 units per year; variable costs $1000 per unit; fixed costs $4,000,000 per year; using the cost-plus pricing approach, what should be the sales price per unit?

Answers: 2

Answer

You know the right answer?

Suppose there are two states that do not trade: iowa and nebraska. each state produces the same two...

Questions