United States can produce either 10 units of bread or 30 units of steel per labour hour. Canada can produce either 19 units of bread or 16 units of steel per labour hour. Suppose Canada follows its comparative advantage in deciding what to produce and trade with United States at a trade price of 2.39 units of steel for one unit of bread. For every 4030 units of the goods that Canada produces and trades with United States, what are Canada's gains from trade in terms of the other goods? Answer: units
United States can produce either 10 units of bread or 30 units of steel per labour hour. Canada can produce either 19 units of bread or 16 units of steel per labour hour. Suppose Canada follows its comparative advantage in deciding what to produce and trade with United States at a trade price of 2.39 units of steel for one unit of bread. For every 4030 units of the goods that Canada produces and trades with United States, what are Canada's gains from trade in terms of the other goods? Answer: units
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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