Essay
Suppose that workers in A can produce 1 unit of S in 3 hours and 1 unit of T in 9 hours.Suppose that the relative price of S in B is 2.Graph the PPF for country A.Indicate the exact slope of the PPF.Show how the autarky equilibrium is determined.Illustrate a hypothetical international trade equilibrium,including production and consumption points,and trade volumes for a given (your assumption-be explicit)but permissible value of the international terms of trade.
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The autarky price of S in A is 1/3,so th...View Answer
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