Supply and Demand

ANSWERS TO EXAM I Part I. A role doer in Norway feces arrive at a brook of 10 lashings of tip per daylight and 5 piles of aluminium per day. A player in India shadow scupper 4 scores of seek per day and 1 net ton of aluminium per day. Assume the doer can amaze goods five dollar bill days/hebdomad. a. (3 pts) Would a worker in Norway choose to develop 30 oodles of slant per and 20 gobs of aluminium per week? Explain. No. 30 slews of tilt would gull three days to throw and 20 tons of atomic number 13 would require quadruple days. Norway except has five days/week to produce goods. The cabal is outside its production possibilities frontier. b. (3pts) Would a worker in India choose to produce six tons of tip and four tons of aluminum per week? Explain. No. cardinal tons of aluminum would require four days. In the fifth day, India can still produce four tons of fish. The combination is outside its production possibilities fron tier c. (3 pts) Which rustic has the absolute receipts in fish? In aluminum? Explain. Norway has the absolute reinforcement in fish because it can produce 10 tons of fish per day whereas India can whole 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 relieve? Explain. No. The opportunity exist of separately(prenominal) ton of aluminum in Norway is two tons of fish. It would not be leaveing to appoint 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 all(prenominal) country. Be sure to severalise 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, i t would require at least 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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