5. The price of trade Suppose that Portugal and Denmark both produce jeans and cheese. Portugal's opportunity cost of producing a pound of cheese is 4 pairs of jeans while Denmark's opportunity cost of producing a pound of cheese is 10 pairs of jeans. By comparing the opportunity cost of producing cheese in the two countries, you can tell that production of cheese and has a comparative advantage in the production of jeans. has a comparative advantage in the Suppose that Portugal and Denmark consider trading cheese and jeans with each other. Portugal can gain from specialization and trade as long as it receives more than of jeans for each pound of cheese it exports to Denmark. Similarly, Denmark can gain from trade as long as it of cheese 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 cheese in terms of jeans) would allow both Denmark and Portugal to gain from trade? Check all that apply. 1 pair of jeans per pound of cheese 6 pairs of jeans per pound of cheese 8 pairs of jeans per pound of cheese 18 pairs of jeans per pound of cheese.

5. The price of trade Suppose that Portugal and Denmark both produce jeans and cheese. Portugal's opportunity cost of producing a pound of cheese is 4 pairs of jeans while Denmark's opportunity cost of producing a pound of cheese is 10 pairs of jeans. By comparing the opportunity cost of producing cheese in the two countries, you can tell that production of cheese and has a comparative advantage in the production of jeans. has a comparative advantage in the Suppose that Portugal and Denmark consider trading cheese and jeans with each other. Portugal can gain from specialization and trade as long as it receives more than of jeans for each pound of cheese it exports to Denmark. Similarly, Denmark can gain from trade as long as it of cheese 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 cheese in terms of jeans) would allow both Denmark and Portugal to gain from trade? Check all that apply. 1 pair of jeans per pound of cheese 6 pairs of jeans per pound of cheese 8 pairs of jeans per pound of cheese 18 pairs of jeans per pound of cheese.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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