3. Using the data in the accompanying table, answer the fol- lowing questions: Canada Italy Points on Production Possibilities Frontier Good X Good Y Good X Good Y 150 90 100 25 60 60 50 50 30 120 75 180 a. For which good does Canada have a comparative advantage? b. For which good does Italy have a comparative advantage? c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization trade case than in the no-specialization-no-trade case. 888

3. Using the data in the accompanying table, answer the fol- lowing questions: Canada Italy Points on Production Possibilities Frontier Good X Good Y Good X Good Y 150 90 100 25 60 60 50 50 30 120 75 180 a. For which good does Canada have a comparative advantage? b. For which good does Italy have a comparative advantage? c. What might be a set of favorable terms of trade for the two countries? d. Prove that both countries would be better off in the specialization trade case than in the no-specialization-no-trade case. 888

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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