N3 5. The price of tradeSuppose that Portugal and Austria both produce jeans and olives. Portugal's opportunity cost of producing a crate of olives is 3 pairs of jeanswhile Austria's opportunity cost of producing a crate of olives is 9 pairs of jeans.By comparing the opportunity cost of producing olives in the two countries, you can tell thathas a comparative advantage in the production of jeans.production of olives andSuppose that Portugal and Austria consider trading olives and jeans with each other. Portugal can gain from specialization and trade as long asof jeans for each crate of olives it exports to Austria. Similarly, Austria can gain from trade as long as itit receives more thanof olives for each pair of jeans it exports to Portugal.receives more thanhas a comparative advantage in theBased on your answer to the last question, which of the following prices of trade (that is, price of olives in terms of jeans) would allow bothAustria and Portugal to gain from trade? Check all that apply.2 pairs of jeans per crate of olives17 pairs of jeans per crate of olives8 pairs of jeans per crate of olives1 pair of jeans per crate of olives4

Comparative advantage refers to the ability of an individual to produce the good at a lower…

5. The price of trade Suppose that Portugal and Austria both produce jeans and olives. Portugal's opportunity cost of producing a crate of olives is 3 pairs of jeans while Austria's opportunity cost of producing a crate of olives is 9 pairs of jeans. By comparing the opportunity cost of producing olives in the two countries, you can tell that has a comparative advantage in the production of jeans. production of olives and has a comparative advantage in the Suppose that Portugal and Austria consider trading olives and jeans with each other. Portugal can gain from specialization and trade as long as it receives more than of jeans for each crate of olives it exports to Austria. Similarly, Austria can gain from trade as long as it of olives for each pair of jeans it exports to Portugal. receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of olives in terms of jeans) would allow both Austria and Portugal to gain from trade? Check all that apply. 2 pairs of jeans per crate of olives 17 pairs of jeans per crate of olives 8 pairs of jeans per crate of olives 1 pair of jeans per crate of olives