# ECO 561T Apply Week 5 Assignment New

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ECO 561T Apply Week 5 Assignment New

ECO 561T Apply Week 5 Assignment

1) The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Karl.

The slope of the PPC between points X and Y is determined by _____ opportunity cost.

2) Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of berries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. Who has the comparative advantage in producing berries?

3) The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Kari.

Who has the greatest comparative advantage in shoe production?

4) Refer to the following graph.

The maximum amount of good A can be consumed in this economy without trade is

5) An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the most of each good that can be produced each day if each worker fully specializes according to his/her comparative advantage?

6) ¬¬¬¬¬¬¬¬¬¬¬¬¬¬Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. If both Amy and Mike produce the good in which they have comparative advantage, the total annual output of this economy will be _______.

7) ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. _______ has the comparative advantage in TVs and _______ has the comparative advantage in radios.

8) ¬¬¬¬¬¬¬¬¬¬¬¬¬¬The country Happy Land claims that it is producing everything its citizens consume. This situation is called

9) Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. Amy has a comparative advantage in producing _____, and Mike has a comparative advantage in producing ______.

10) An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing _____ while Rich should specialize in producing _______.

11) If the exchange rate moves from 10 Mexican pesos per U.S. dollar to 8 Mexican pesos per U.S. dollar, then the Mexican peso has ______ and the U.S. dollar has _____.

12) A decrease in the value of a currency relative to other currencies is called a(n):

13) A country's nominal exchange rate, e, is defined as the number of units of:

14) A decrease in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ______ relative to the foreign currency.

15) ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬An increase in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ______ relative to the foreign currency

16) For a given domestic and foreign price level, an increase in the nominal exchange rate ______ the real exchange rate.

17) If a certain automotive part can be purchased in Mexico for 60 pesos or in the United States for \$6.25 and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:

18) There is ______ connection between the strength of a country’s currency and the strength of its ______.

19) An increase in the real exchange rate will tend to ______ exports and to ______ imports.

20) If the nominal exchange rate were to be expressed as the number of units of domestic currency per unit of foreign currency, and that rate increases, then the domestic currency has:

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