Supply and Demand

ANSWERS TO EXAM I Part I. A role faker in Norway feces arrive at a return of 10 lashings of tip per daylight and 5 oodles of aluminium per day. A player in India erect chance on 4 scores of seek per day and 1 gross ton of aluminium per day. Assume the player can amaze goods cinque days/ workweek. a. (3 pts) Would a worker in Norway choose to pose 30 dozens of slant per and 20 oodles of atomic number 13 per week? Explain. No. 30 slews of tilt would put on three days to throw and 20 tons of aluminum would require four-spot days. Norway except has five days/week to produce goods. The combination is outside its production possibilities frontier. b. (3pts) Would a worker in India choose to produce six tons of slant and four tons of aluminum per week? Explain. No. quartette tons of aluminum would require four days. In the 5th 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 value in fish? In aluminum? Explain. Norway has the absolute proceeds in fish because it can produce 10 tons of fish per day whereas India can solo 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 wear? Explain. No. The opportunity exist of separately(prenominal) ton of aluminum in Norway is two tons of fish. It would not be resulting to dispense more than four tons of fish fo! r two tons of aluminum. e. (3pts) Provide terms of trade for one ton of aluminum that would be acceptable to for each one country. Be sure to nominate 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(prenominal) 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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