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1、WORD格式可编辑Chapter21.Homehas1200unitsoflaboravailable.Itcanproducetwogoods,applesandbananas.Theunitlaborrequirementinappleproductionis3,whileinbananaproductionitis2.a.Graphouttheproductionpossibilitiesfrontier:b.Whatistheopportunitycostofapplesintermsofbananas?c.Intheabsenceoftrade,whatwouldt
2、hepriceofapplesintermsofbananasbe?Intheabsenceoftrade,sincelaboristheonlyfactorofproductionandsupplydecisionsaredeterminedbytheattemptsofindividualstomaximizetheirearningsinacompetitiveeconomy,onlywhenwillbothgoodsbeproduced.So2.Homeisasdescribedinproblem1.Thereisnowalsoanothercountry,Forei
3、gn,withalaborforceof800.Foreign’sunitlaborrequirementinappleproductionis5,whileinbananaproductionitis1.a.GraphForeign’sproductionpossibilitiesfrontier:b.Constructtheworldrelativesupplycurve.WORD格式可编辑3.Nowsupposeworldrelativedemandtakesthefollowingform:Demandforapples/demandforbananas=priceo
4、fbananas/priceofapples.a.Graphtherelativedemandcurvealongwiththerelativesupplycurve:∵Whenthemarketachievesitsequilibrium,wehave∴RDisahyperbolab.Whatistheequilibriumrelativepriceofapples?TheequilibriumrelativepriceofapplesisdeterminedbytheintersectionoftheRDandRScurves.RD:RS:∴WORD格式可编辑∴c.Des
5、cribethepatternoftrade.∵∴Inthistwo-countryworld,Homewillspecializeintheappleproduction,exportapplesandimportbananas.Foreignwillspecializeinthebananaproduction,exportbananasandimportapples.d.ShowthatbothHomeandForeigngainfromtrade.InternationaltradeallowsHomeandForeigntoconsumeanywherewithin
6、thecoloredlines,whichlieoutsidethecountries’productionpossibilityfrontiers.Andtheindirectmethod,specializinginproducingonlyoneproductionthentradewithothercountry,isamoreefficientmethodthandirectproduction.Intheabsenceoftrade,Homecouldgainthreebananasbyforegoingtwoapples,andForeigncouldgainb
7、yoneforegoingfivebananas.Tradeallowseachcountrytotradetwobananasforoneapple.HomecouldthengainfourbananasbyforegoingtwoappleswhileForeigncouldgainoneapplebyforegoingonlytwobananas.SobothHomeandForeigngainfromtrade.4.Supposethatinsteadof1200workers,Homehad