3. Suppose that there are 10 million workers in Canada and that each of these workers can produce either 2 cars or 30 bushels of wheat in a year.
a. What is the opportunity cost of producing a car in Canada? What is the opportunity cost of producing a bushel of wheat in Canada? Explain the relationship between the opportunity costs of the two goods.
b. Draw Canada’s production possibilities frontier. If Canada chooses to consume 10 million cars, how much wheat can it consume without trade? Label this point on the production possibilities frontier.
c. Now suppose that the United States offers to buy 10 million cars from Canada in exchange for 20 bushels of wheat per car. If Canada continues to consume 10 million cars, how much wheat does this deal allow Canada to consume? Label this point on your diagram. Should Canada accept the deal?
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Which of the following would create the most money? the initial deposit is $6,500 and the required reserve ratio is 20 percent. the initial deposit is $3,000 and the required reserve ratio is 10 percent. the initial deposit is $7,500 and the required reserve ratio is 25 percent. the initial deposit is $4,500 and the required reserve ratio is 15 percent.
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Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. in this case, the country that produces jeans will produce million pairs per week, and the country that produces corn will produce million bushels per week.
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3. Suppose that there are 10 million workers in Canada and that each of these workers can produce ei...
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