Need help on my study guide ASAP please help!! Question 15 1 pts One of the basi
ID: 1124043 • Letter: N
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Need help on my study guide ASAP please help!!
Question 15 1 pts One of the basic principles of economics is that markets are usually a good way to organize economic actvity. This principle is explained by the study of O factor markets. energy markets. O welfare economics. O labor economics. Question 16 1 pts Total surplus in a market is equal to O consumer suplus+producer suplus. O value to buyers amount paid by buyers. O amount received by sellers costs of sellers. O producer suplus - consumer suplus. Question 17 1 pts The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pouno of corm for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that Wheatland has a comparative advantage, relative to other countries, in producing con. other countries have a comparative advantage, relative to Wheatland, in producing fish. the price of fish in Wheatland exceeds the world price of fish. O O if Wheatland were to allow trade, it would import comExplanation / Answer
(15)
The factors of production are land, labor, capital, and entrepreneur. All this factors together helps to produce goods and services.
Therefore through factors markets, economic activity can be organized in the better way.
Hence option first is the correct answer.
(16)
The total surplus can be defined as the sum of consumer surplus and producer surplus.
hence option first is the correct answer.
(17)
Opportunity cost can be defined as the production of output which is given up for producing some additional units of another output.
It is said that a person has a comparative advantage in the production of something if he can produce it at lower opportunity cost compare to someone else.
In Wheatland
The opportunity cost of 1 pound corn = 3 pounds of fish
The opportunity cost of 1 pound of fish = 1/3 pounds of corn
=0.33 pounds of corn
In other countries.
The opportunity cost of 1 pound of corn = 2 pounds of fish
The opportunity cost of 1 pound of fish = 1/2 pounds of corn
=0.50 pounds of corn
Since the opportunity cost of producing corn is lower in the other country relative to the Wheatland, therefore the other country has a comparative advantage in the production of corn.
Since the opportunity cost of producing fish is lower in the Wheatland relative to the other country, therefore Wheatland has a comparative advantage in the production of fish.
Therefore Wheatland produces only fish and another country, produce only corn. Hence if the trade is allowed, The Wheatland would import corn.
Hence option fourth is the correct answer.
Option four; if the Wheatland allow trade, The Wheatland would import corn.
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