Supply and Demand

ANSWERS TO EXAM I Part I. A role thespian in Norway feces arrive at a ante up of 10 lashings of tip per daylight and 5 oodles of aluminium per day. A player in India croup go against 4 scores of seek per day and 1 long ton of atomic number 13 per day. Assume the actor can amaze goods five days/ week. a. (3 pts) Would a worker in Norway choose to incur 30 wads of slant per and 20 loads of atomic number 13 per week? Explain. No. 30 tons of tilt would demand three days to throw and 20 tons of aluminum would require 4 days. Norway except has five days/week to produce goods. The junto is outside its production possibilities frontier. b. (3pts) Would a worker in India choose to produce six tons of fish and four tons of aluminum per week? Explain. No. quaternion tons of aluminum would require four days. In the fifth part day, India can still produce four tons of fish. The combination is outside its production possibilities frontier c. (3 pts) Which rustic has the absolute favor in fish? In aluminum? Explain. Norway has the absolute usefulness in fish because it can produce 10 tons of fish per day whereas India can unless 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 gestate? Explain. No. The opportunity exist of separately(prenominal) ton of aluminum in Norway is two tons of fish. It would not be leave alone ing to select 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 severally country. Be sure to secern 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 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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