Suppose that companies in US can manufacture, using one year of labor, 10 units of machinery and 200 tons of corn. Companies in Mexico, using the same input of labor, can manufacture 6 units of machinery and 180 tons of corns. A - Which trade theory can best demonstrate the benefits of trade in this example and explain? B - Explain whether each county can specialize in production of one product or not and determine which product to specialize.

Suppose that companies in US can manufacture, using one year of labor, 10 units of machinery and 200 tons of corn. Companies in Mexico, using the same input of labor, can manufacture 6 units of machinery and 180 tons of corns. A - Which trade theory can best demonstrate the benefits of trade in this example and explain? B - Explain whether each county can specialize in production of one product or not and determine which product to specialize.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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