There are 100 workers in Pakistan, and each worker can produce either 10 shirts or 2 hats. There are 200 workers in the Bangladesh, and each can produce 4 shirts or 10 hats.] 1. Draw the Production Possibility Curves (PPC) for each country. What is the opportunity cost of shirts in Pakistan? What is the opportunity cost of shirts in Bangladesh? Which country has a comparative advantage in the production of shirts? 2. In the absence of trade, if Pakistan consumes 600 shirts, how many hats can it consume? In the absence of trade, if Bangladesh consumes 500 hats, how many shirts can it consume? 3. Someone now proposes that Bangladesh and Pakistan enter into a trade agreement. Under this agreement, the Bangladesh will give Pakistan 500 hats and Pakistan will give Bangladesh 200 shirts. If Pakistan continues to consume 600 shirts, how many hats will it be able to consume under this proposal? If Bangladesh continues to consume 500 hats, how many shirts will it be able to consume under this proposal? Should Pakistan accept this proposal? Should Bangladesh accept this proposal?
There are 100 workers in Pakistan, and each worker can produce either 10 shirts or 2 hats. There are 200 workers in the Bangladesh, and each can produce 4 shirts or 10 hats.]
1. Draw the Production Possibility
2. In the absence of trade, if Pakistan consumes 600 shirts, how many hats can it consume? In the absence of trade, if Bangladesh consumes 500 hats, how many shirts can it consume?
3. Someone now proposes that Bangladesh and Pakistan enter into a trade agreement. Under this agreement, the Bangladesh will give Pakistan 500 hats and Pakistan will give Bangladesh 200 shirts. If Pakistan continues to consume 600 shirts, how many hats will it be able to consume under this proposal? If Bangladesh continues to consume 500 hats, how many shirts will it be able to consume under this proposal? Should Pakistan accept this proposal? Should Bangladesh accept this proposal?
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