RMT103 Homework Answered Suppose the economy opens to trade and the new world price of gadgets...

Transcribed Image Text:

RMT103 Homework Answered Suppose the economy opens to trade and the new world price of gadgets is 2 meals per gadget (recall the domestic price is 1 meal per gadget). Click on the production point where the economy should specialize to maximize the value of production at world prices, whether measured in terms of gadgets or measured in terms of meals. 20 18 ag 16 meals 14 12 10 8 6 4 2 0 Targets placed: 0/1 You can place up to 1 targets RMN110 Homework Unanswered (+₂ Answered - Incorrect. 1 attempt left C IN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 manufacturea (gadgets) Undo Delete selected Remove All Resubmit Notice that as we opened up to trade, as drawn above, the country specialized in the production of manufactures. It is now producing only gadgets, but it can now sell these on the world market at the world market price=2 ag meals per gadget. The dashed line now represents national income and world prices. The country can purchase any consumption bundle along (or below) this new national line. in the closed economy, national income could be measured as 10 million ag meals a day. If the economy opens to trade and specializes in the production of manufactures, what is the new national income, measured in terms of millions of agricultural meals? Enter just a number (e.g. 5 for 5 million). Type your numeric answer and submit RMT103 Homework Answered Suppose the economy opens to trade and the new world price of gadgets is 2 meals per gadget (recall the domestic price is 1 meal per gadget). Click on the production point where the economy should specialize to maximize the value of production at world prices, whether measured in terms of gadgets or measured in terms of meals. 20 18 ag 16 meals 14 12 10 8 6 4 2 0 Targets placed: 0/1 You can place up to 1 targets RMN110 Homework Unanswered (+₂ Answered - Incorrect. 1 attempt left C IN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 manufacturea (gadgets) Undo Delete selected Remove All Resubmit Notice that as we opened up to trade, as drawn above, the country specialized in the production of manufactures. It is now producing only gadgets, but it can now sell these on the world market at the world market price=2 ag meals per gadget. The dashed line now represents national income and world prices. The country can purchase any consumption bundle along (or below) this new national line. in the closed economy, national income could be measured as 10 million ag meals a day. If the economy opens to trade and specializes in the production of manufactures, what is the new national income, measured in terms of millions of agricultural meals? Enter just a number (e.g. 5 for 5 million). Type your numeric answer and submit

Answer rating: 100% (QA)

Supply and demand form the most fundamental concepts of economics Whether you are an academic fa... View the full answer