Consider the case of two countries, Afghanistan and the US, both producing carpets and fighteraircraft. The tale below shows output rates per day in the two countries if all resources are fullyand efficiently employed. Use this information to answer Question (a), (b) and (c).CarpetsFighter aircraftAfghanistan1004US50025a)Based on this information:А.there is no opportunity for mutually beneficial trade between the two countries.В.Afghanistan has an absolute advantage in the production of both goods.C.Afghanistan should import carpets from the US.D.Afghanistan has a comparative advantage in the production of aircraft.Е.the US should export fighter aircraft to Afghanistan.b)An appropriate international exchange ratio that would allow mutually advantageous trade totake place would be:1 aircraft = 25 carpets.1 aircraft = 20 carpets.1 carpet = 4 aircraft.1 carpet = 0,04 aircraft.1 aircraft = 22 carpets.А.В.C.D.Е.

Free trade refers to the exchange of goods and services from one country to another country without…

4 Consider the case of two countries, Afghanistan and the US, both producing carpets and fighter aircraft. The tale below shows output rates per day in the two countries if all resources are fully and efficiently employed. Use this information to answer Question (a), (b) and (c). Carpets Fighter aircraft Afghanistan 100 4 US 500 25 a) Based on this information: А. there is no opportunity for mutually beneficial trade between the two countries. Afghanistan has an absolute advantage in the production of both goods. Afghanistan should import carpets from the US. В. С. D. Afghanistan has a comparative advantage in the production of aircraft. Е. the US should export fighter aircraft to Afghanistan. b) An appropriate international exchange ratio that would allow mutually advantageous trade to take place would be: 1 aircraft = 25 carpets. 1 aircraft = 20 carpets. 1 carpet = 4 aircraft. 1 carpet = 0,04 aircraft. 1 aircraft = 22 carpets. А. В. С. D. Е.

4 Consider the case of two countries, Afghanistan and the US, both producing carpets and fighter aircraft. The tale below shows output rates per day in the two countries if all resources are fully and efficiently employed. Use this information to answer Question (a), (b) and (c). Carpets Fighter aircraft Afghanistan 100 4 US 500 25 a) Based on this information: А. there is no opportunity for mutually beneficial trade between the two countries. Afghanistan has an absolute advantage in the production of both goods. Afghanistan should import carpets from the US. В. С. D. Afghanistan has a comparative advantage in the production of aircraft. Е. the US should export fighter aircraft to Afghanistan. b) An appropriate international exchange ratio that would allow mutually advantageous trade to take place would be: 1 aircraft = 25 carpets. 1 aircraft = 20 carpets. 1 carpet = 4 aircraft. 1 carpet = 0,04 aircraft. 1 aircraft = 22 carpets. А. В. С. D. Е.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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