Chat with AI
Macroeconomics 12th Edition by William Baumol,Alan Blinder
Edition 12ISBN: 978-1305033016Macroeconomics 12th Edition by William Baumol,Alan Blinder
Edition 12ISBN: 978-1305033016 Exercise 1
The following table describes the number of yards of cloth and barrels of wine that can be produced with a week's worth of labor in England and Portugal. Assume that no other inputs are needed.
a. If there is no trade, what is the price of wine in terms of cloth in England?
b. If there is no trade, what is the price of wine in terms of cloth in Portugal?
c. Suppose each country has 1 million weeks of labor available per year. Draw the production possibilities frontier for each country.
d. Which country has an absolute advantage in the production of which good(s)? Which country has a comparative advantage in the production of which good(s)?
e. If the countries start trading with each other, which country will specialize and export which good?
f. What can be said about the price at which trade will take place?
a. If there is no trade, what is the price of wine in terms of cloth in England?
b. If there is no trade, what is the price of wine in terms of cloth in Portugal?
c. Suppose each country has 1 million weeks of labor available per year. Draw the production possibilities frontier for each country.
d. Which country has an absolute advantage in the production of which good(s)? Which country has a comparative advantage in the production of which good(s)?
e. If the countries start trading with each other, which country will specialize and export which good?
f. What can be said about the price at which trade will take place?
Explanation
Verified
Verified
f. Price of the good at the time of trad...
Macroeconomics 12th Edition by William Baumol,Alan Blinder
Why don’t you like this exercise?
Other Minimum 8 character and maximum 255 character
Character 255
