Economics Answers

Judy’s and Dan’s demand schedules for cola are: Quantity demanded by Price Judy Dan (cents per carton) (cartons per week) 10 12 6 30 9 5 50 6 4 70 3 3 90 1 2 If Judy and Dan are the only two individuals, what is the market demand for cola?

Why does government impose price celling and price floor an certain commodity who are the beneficiaries of both

What is the results of empirical testing of the Ricardian model?

How is the combined supply curve of both nations for each of the traded commodities determined? How is the equillibrium-relative commodity price determined with trade?

What is meant by complete specialization? by incomplete specialization? Why do both nations gain from trade in the first instance but only the small nation in the second?

Why is a nation's production possibility frontier the same as its consumption frontier in the absence of trade? How does the nation decide how much of each commodity to consume in the absence of trade?

What is the relationship between opportunity costs and the production possibility frontier of a nation? How does the production possibility frontier look under constant opportunity costs? What is the relationship between the opportunity cost of a commodity and the relative price of that commodity? How can they be visualize graphically?

Why is Ricardo's explanation of the law of comparative advantage unacceptable? What acceptable theory can be used to explain the law?

What is the exception to the law of comparative advantage? How prevalent is it?

In the absence of trade, a nation's production possibility frontier is also its consumption frontier. with trade, each nation can specialize in producing the commodity of its comparative advantage and exchange part of its comparative disadvantage. By so doing, both nations end up consuming more of both commodities than without trade. With complete specialization, the equilibrium-relative commodity prices will be between the pretrade-relative commodity prices prevailing in each nation