Two countries are willing to trade and they have the following information: Country A produces 1000 units of wheat and 500 units of cell phones in a year. Country B produces 600 units of wheat and 400 units of cell phones a year. Both countries have the same population. a.) Find the comparative advantage of each country. b.) If they engage in trade what product will each country export and import.
Two countries are willing to trade and they have the following information: Country A produces 1000 units of wheat and 500 units of cell phones in a year. Country B produces 600 units of wheat and 400 units of cell phones a year. Both countries have the same population. a.) Find the comparative advantage of each country. b.) If they engage in trade what product will each country export and import.
Chapter28: International Trade
Section: Chapter Questions
Problem 7P
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Two countries are willing to trade and they have the following information: Country A produces 1000 units of wheat and 500 units of cell phones in a year. Country B produces 600 units of wheat and 400 units of cell phones a year. Both countries have the same population.
a.) Find the
b.) If they engage in trade what product will each country export and import.
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