(b) Assuming that there are only two nations in the world, Africa and the USA, each nation produces gold (G) and corn (C). Also assume that labor is the only factor of production. The table below shows how much of each good a country can produce using one hour of labor time. AFRICA USA GASOLINE (barrels/hr) CORN (tonnes/hr) 50 15 30 25 I.Identify which country has the Absolute Advantage and Disadvantage in each good. Justify your answer. II.Identify which country has the Comparative Advantage and Disadvantage in each good. Justify your answer. III.What is a term of trade? Identify the term of trade for both countries. Justify your answer.

(b) Assuming that there are only two nations in the world, Africa and the USA, each nation produces gold (G) and corn (C). Also assume that labor is the only factor of production. The table below shows how much of each good a country can produce using one hour of labor time. AFRICA USA GASOLINE (barrels/hr) CORN (tonnes/hr) 50 15 30 25 I.Identify which country has the Absolute Advantage and Disadvantage in each good. Justify your answer. II.Identify which country has the Comparative Advantage and Disadvantage in each good. Justify your answer. III.What is a term of trade? Identify the term of trade for both countries. Justify your answer.

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Description: Please explain the calculation for part iii (b) Assuming that there are only two nations in the world, Africa and the USA, eachnation produces gold (G) and corn (C). Also assume that labor is the only factor ofproduction. The table below shows how mu

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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