2. The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product-mix for China is alternative B and for the United States alternative U. Production Possibilities: China Product A B C D E F Apparel 150,000 120,000 90,000 60,000 30,000 0 Chemicals (in Tons) 0 30 60 90 120 150 Production Possibilities: United States Product R S T U V W Apparel 50,000 40,000 30,000 20,000 10,000 0 Chemicals (in Tons) 0 20 40 60 80 100 c. What are the limits of the terms of trade? Limits of the terms of trade = 1,000 units of apparel for____ ton of chemicals and 1,000 units of apparel for_____ tons of chemicals.
2. The following are production possibilities tables for China and the United States. Assume that before specialization and trade the optimal product-mix for China is alternative B and for the United States alternative U.
| Production Possibilities: China | ||||||
| Product | A | B | C | D | E | F |
| Apparel | 150,000 | 120,000 | 90,000 | 60,000 | 30,000 | 0 |
| Chemicals (in Tons) | 0 | 30 | 60 | 90 | 120 | 150 |
| Production Possibilities: United States | ||||||
| Product | R | S | T | U | V | W |
| Apparel | 50,000 | 40,000 | 30,000 | 20,000 | 10,000 | 0 |
| Chemicals (in Tons) | 0 | 20 | 40 | 60 | 80 | 100 |
c. What are the limits of the terms of trade?
Limits of the terms of trade = 1,000 units of apparel for____ ton of chemicals and 1,000 units of apparel for_____ tons of chemicals.
An optimal mix boosts the potential unit deals while keeping up with - or preferably improving - the organization's productivity. While deciding your item mix, you should adjust both the present moment and long-haul objectives of the undertaking.
Limit to terms of trade between two countries are provided by the opportunity costs of production of goods between two countries .
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