8.(e)(f)Answer ALL parts of this question.Britain and France are countries in a Ricardian trade model. Each country produceswine and bread.Unit labour requirement for wine in Britain, in hours: aw = 12Unit labour requirement for bread in Britain, in hours: aLB = 3Unit labour requirement for wine in France, in hours: aiw = 2Unit labour requirement for bread in France, in hours: aiB = 1Britain and France both have 600 hours of labour available.Qw and QB are the quantities of wine and bread produced in Britain.Qw and Q are the quantities produced in France.With wine on the y-axis and bread on the x-axis, draw and label the production.possibility frontiers for both countries. Label the axes.Now assume there is free trade. On a new diagram, show the world relative supplyof wine, giving world relative price on the y-axis asPwРВand world relative quantity on the x-axis asQw + QwQB +QB

e)Output production PPF for each country Britain PPFWhen 0 production of wine then bread…

e and bread. t labour requirement t labour requirement t labour requirement t labour requirement for bread in France, in hours: aiB = 1 ain and France both have 600 hours of labour available. for wine in Britain, in hours: aw = 12 for bread in Britain, in hours: aLB = 3 for wine in France, in hours: aiw = 2 and QB are the quantities of wine and bread produced in Britain. and Q are the quantities produced in France. With wine on the y-axis and bread on the x-axis, draw and label the producti ossibility frontiers for both countries. Label the axes. ow assume there is free trade. On a new diagram, show the world relative s wine, giving world relative price on the y-axis as Pw PB d world relative quantity on the x-axis as Qw + Qw QB+QB

e and bread. t labour requirement t labour requirement t labour requirement t labour requirement for bread in France, in hours: aiB = 1 ain and France both have 600 hours of labour available. for wine in Britain, in hours: aw = 12 for bread in Britain, in hours: aLB = 3 for wine in France, in hours: aiw = 2 and QB are the quantities of wine and bread produced in Britain. and Q are the quantities produced in France. With wine on the y-axis and bread on the x-axis, draw and label the producti ossibility frontiers for both countries. Label the axes. ow assume there is free trade. On a new diagram, show the world relative s wine, giving world relative price on the y-axis as Pw PB d world relative quantity on the x-axis as Qw + Qw QB+QB

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 10PA

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