Coffee and Cheese Exchange in a POW Camp. Suppose that in the British compound of a prisoner of war (POW) camp, the price of cheese is 18 cigarettes per cheese ration and the price of coffee beans is 6 cigarettes per coffee ration. In the French compound, the price of coffee beans is 18 cigarettes per ration. a. Is there an opportunity for beneficial exchange? (Enter all values below as integer values.) b. A British prisoner could exchange his cheese ration for cigarettes, then exchange the cigarettes for coffee rations in the British compound. If he travels to the French compound, he could exchange the coffee for cigarettes. When he returns to the British compound, he can exchange the cigarettes for cheese rations. In other words, his net gain from trade is cheese rations.

Coffee and Cheese Exchange in a POW Camp. Suppose that in the British compound of a prisoner of war (POW) camp, the price of cheese is 18 cigarettes per cheese ration and the price of coffee beans is 6 cigarettes per coffee ration. In the French compound, the price of coffee beans is 18 cigarettes per ration. a. Is there an opportunity for beneficial exchange? (Enter all values below as integer values.) b. A British prisoner could exchange his cheese ration for cigarettes, then exchange the cigarettes for coffee rations in the British compound. If he travels to the French compound, he could exchange the coffee for cigarettes. When he returns to the British compound, he can exchange the cigarettes for cheese rations. In other words, his net gain from trade is cheese rations.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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