Consider the data in Table 32-1. Would U.S. residents gain from the trade of U.S. tablets for Indian apps if the rate of exchange of tablet devices for digital apps happened to be 3 tablets per app?

Short Answer

Expert verified

Whereas if currency value of android phones for phone applications is 3 tablets per app, U.S. The sales of Indian technology on American iPads will not aid people.

Step by step solution

01

Given Information

If that the balance of trade change to 3 ipads with every computer application, the U.s would be a significant exporter of 3 tablets. With every foothold buy, buyers will forfeit 3 tablets. At this ratio of turnover, they won't be seek to benefit from trade.

02

Explanation

Which can be seen in chart 32-1, the U.s will also have real qualifications in the creation of Android tablets, but India will be a key power in digital learning.If the The Us commits all of its assets to the creation of tablet computers, it can produce 225 sheets per hourly. Yet, if India employs all of its assets in the development of educational technologies, this could ensure 100 applications each hour. The United States will receive 100 innovative capabilities for 225 tablets when the exchange launches. That is, 2.25 tabs per advanced application should be abandoned.

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Most popular questions from this chapter

Refer to your answers to Problem 32-7when answering the following questions.

a. Which one of the following rates of exchange of modems for flash memory drives will be acceptable to both nations: (i) 3modems for 1flesh drive; (ii) 1modem for 1flash drive; or (iii) 1flash drive for 2.5modems? Explain.

b. Suppose that each nation decides to use all available resources to produce only the good for which it has a comparative advantage and to engage in trade at the single feasible rate of exchange you identified in part (a). Prior to specialization and trade, residents of South Shore chose to produce and consume 30modems per hour and 90flash drives per hour, and residents of East Isle chose to produce and consume 40modems per hour and 30flash drives per hour. Now, residents of South Shore agree to export to Fast Isle the same quantity of South Shore's specialty good that Fast Isle residents were consuming prior to engaging in international trade. How many units of East Isle's specialty good does South Shore import from East Isle?

c. What is South Shore's hourly consumption of modems and flash drives after the nation specializes and trades with East Isle? What is East Isles hourly consumption of modems and flash drives after the nation specializes and trades with South Shore?

d. What consumption gains from trade are experienced by South Shore and East Isle?

Why was it more efficient to end the quota? (Hint: Why do you think that people usually accept money in exchanges instead of engaging in barter of one good for another every time they trade?)

Some critics of the North American Free Irade Agreement (NAFTA) suggest that firms outside NAFTA nations sometimes shift unassembled inputs to Mexico, assemble the inputs into final goods there, and then export the final product to the United States in order to take advantage of Mexican trade preferences. What term describes what these critics are claiming is occurring with regard to U.S.-Mexican trade as a result of NAFTA? Explain your reasoning.

Why do you think that increased specialization in specific agricultural products has accompanied growth in African exports of those products?

To answer the questions below, consider the following table for the neighboring nations of Northland and West Coast. The table lists maximum feasible hourly rates of production of pastries if no sandwiches are produced and maximum feasible hourly rates of production of sandwiches if no pastries are produced. Assume that the opportunity costs of producing these goods are constant in both nations.

a. What is the opportunity cost of producing pastries in Northland? Of producing sandwiches in Northland?

b. What is the opportunity cost of producing pastrics in West Coast? Of producing sandwiches in West Coast?

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