Chapter 3

 

Use the following table to answer the next two questions. The table shows the number of hours required to produce one unit of output of fishhooks and dill pickles in Sweden and Germany:
1.









Graph the following curves by clicking here
a.

If Sweden has 1000 hours of labor available, graph its production possibilities frontier. Select some point on Sweden's PPF and label the point "A."

b.

Suppose Sweden and Germany agree to trade at an international terms of trade of 1 dill pickle = 0.667 fishhooks (or 1 fishhook = 1.5 dill pickles). On Swedens's PPF, label the post-trade production point "B."
c.
Draw and label the consumption possibilities frontier.
d. Select a point on the CPF that would represent an increase in consumption of both goods relative to point A. Label the point "C."
View graphing answers to question 1 by clicking
2. Graph the following curves by clicking here
a. If Germany also has 1000 hours of labor available, graph its production possibilities frontier. Select some point on Germany's PPF and label the point "D."
b. Suppose Sweden and Germany agree to trade at an international terms of trade of 1 dill pickle = 0.667 fishhooks (or 1 fishhook = 1.5 dill pickles). On Germany's PPF, label the post-trade production point "E."
c. Draw and label the consumption possibilities frontier.
d. Select a point on the CPF that would represent an increase in consumption of both goods relative to point D. Label the point "F."

View graphing answers to question 2 by clicking




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