5. The price of trade Suppose that France and Denmark both produce beer and stained glass. France's opportunity cost of producing a pane of stained glass is 5 barrels of beer while Denmark's opportunity cost of producing a pane of stained glass is 10 barrels of beer. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that has a comparative advantage in the production of stained glass and has a comparative advantage in the production of beer. Suppose that France and Denmark consider trading stained glass and beer with each other. France can gain from specialization and trade as long as it receives more than of beer for each pane of stained glass it exports to Denmark. Similarly, Denmark can gain from trade as long as it receives more than of stained glass for each barrel of beer it exports to France. Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of beer) would allow both Denmark and France to gain from trade? Check all that apply. 1 barrel of beer per pane of stained glass 2 barrels of beer per pane of stained glass 6 barrels of beer per pane of stained glass 9 barrels of beer per pane of stained glass

5. The price of trade Suppose that France and Denmark both produce beer and stained glass. France's opportunity cost of producing a pane of stained glass is 5 barrels of beer while Denmark's opportunity cost of producing a pane of stained glass is 10 barrels of beer. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that has a comparative advantage in the production of stained glass and has a comparative advantage in the production of beer. Suppose that France and Denmark consider trading stained glass and beer with each other. France can gain from specialization and trade as long as it receives more than of beer for each pane of stained glass it exports to Denmark. Similarly, Denmark can gain from trade as long as it receives more than of stained glass for each barrel of beer it exports to France. Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of beer) would allow both Denmark and France to gain from trade? Check all that apply. 1 barrel of beer per pane of stained glass 2 barrels of beer per pane of stained glass 6 barrels of beer per pane of stained glass 9 barrels of beer per pane of stained glass

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to Table 19.1. Mexico has Group of answer choices a comparative advantage but not an absolute advantage in orange production. an absolute advantage and a comparative advantage in orange production. a comparative advantage but not an absolute advantage in banana production. an absolute advantage and a comparative advantage in banana production.
? Q 5. The price of trade Suppose that Hungary and Luxembourg both produce boo and shoes. Hungary's opportunity cost of producing a pair shoes is 4 pairs of boots while Luxembourg's opportunity cost of producing a pair of shoes is 12 pairs of boots. By comparing the opportunity cost of producing shoes in t two countries, you can tell that has a comparative has a A+ advantage in the production of shoes and comparative advantage in the production of boots. Suppose that Hungary and Luxembourg consider trading shoes and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each pair of shoes it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it receives more than of shoes for each pair of boots it exports to Hungary. Based on your answer to the last question, which of the following prices of trade (that is, price of shoes in terms of boots) would allow both Luxembourg and Hungary to gain from trade?…