The graph to the right depicts an economy, Home, which produces flowers and soybeans. Its production possibilities frontier is shown as TT. One of Home's isovalue lines is also shown as VV. Home exists and trades with a second country, Foreign which also produces flowers and soybeans. Assume that Home is maximizing its value of output. 1.) Using the point drawing tool, identify this maximizing point and label it with an X. Also assume that Home consumers maximize their utility. The indifference curve for Home is labeled IC. 2.) Using the point drawing tool, identify the point of consumption by Home consumers. Label this point Z. Carefully follow the instructions above and only draw the required objects. Which of the following statements is true? O A. Home exports 4 units of soybeans. OB. Home imports 4 units of flowers. OC. Home imports 2 units of soybeans. O D. Home exports 4 units of flowers. 26- 24- 22+ 20- 18- 16- 14- 12- 10- 8- 6- 4- 2+ 0+ 0 Trade in the Standard Model (Home) Soybean Production IC VV TT 2 4 6 8 10 12 14 16 18 20 22 24 26 Flower Production Q U

The graph to the right depicts an economy, Home, which produces flowers and soybeans. Its production possibilities frontier is shown as TT. One of Home's isovalue lines is also shown as VV. Home exists and trades with a second country, Foreign which also produces flowers and soybeans. Assume that Home is maximizing its value of output. 1.) Using the point drawing tool, identify this maximizing point and label it with an X. Also assume that Home consumers maximize their utility. The indifference curve for Home is labeled IC. 2.) Using the point drawing tool, identify the point of consumption by Home consumers. Label this point Z. Carefully follow the instructions above and only draw the required objects. Which of the following statements is true? O A. Home exports 4 units of soybeans. OB. Home imports 4 units of flowers. OC. Home imports 2 units of soybeans. O D. Home exports 4 units of flowers. 26- 24- 22+ 20- 18- 16- 14- 12- 10- 8- 6- 4- 2+ 0+ 0 Trade in the Standard Model (Home) Soybean Production IC VV TT 2 4 6 8 10 12 14 16 18 20 22 24 26 Flower Production Q U

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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