Consider an economy with two countries and two goods. Unit labor requirement for each product is given in the table below. Apple Domestic 1 Foreign 4 Orange 2 1 Available Labor 1,000 7,000 Suppose that Domestic and Foreign can trade apple in exchange for orange at 1-to-1 ratio. Assume that consumers also prefer consuming at one apple for every orange. Calculate the increase in consumption of orange in Foreign after trade opens. Report your answer in 3-decimal precision. Ex: If your answer is 666.54634654674, then 666.546.
Consider an economy with two countries and two goods. Unit labor requirement for each product is given in the table below. Apple Domestic 1 Foreign 4 Orange 2 1 Available Labor 1,000 7,000 Suppose that Domestic and Foreign can trade apple in exchange for orange at 1-to-1 ratio. Assume that consumers also prefer consuming at one apple for every orange. Calculate the increase in consumption of orange in Foreign after trade opens. Report your answer in 3-decimal precision. Ex: If your answer is 666.54634654674, then 666.546.
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter21: International Trade And Comparative Advantage
Section: Chapter Questions
Problem 2TY
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Question
![Consider an economy with two countries and two goods.
Unit labor requirement for each product is given in the table below.
Domestic
Foreign
Apple
1
4
Orange
2
1
Available
Labor
1,000
7,000
Suppose that Domestic and Foreign can trade apple in exchange for orange at 1-to-1 ratio.
Assume that consumers also prefer consuming at one apple for every orange.
Calculate the increase in consumption of orange in Foreign after trade opens.
Report your answer in 3-decimal precision.
Ex: If your answer is 666.54634654674, then 666.546.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bc46c3a-579c-43e4-ace3-c836724a200c%2F29efa651-9e37-4c05-adc1-bcaa121508bc%2Fl7f2epg_processed.png&w=3840&q=75)
Transcribed Image Text:Consider an economy with two countries and two goods.
Unit labor requirement for each product is given in the table below.
Domestic
Foreign
Apple
1
4
Orange
2
1
Available
Labor
1,000
7,000
Suppose that Domestic and Foreign can trade apple in exchange for orange at 1-to-1 ratio.
Assume that consumers also prefer consuming at one apple for every orange.
Calculate the increase in consumption of orange in Foreign after trade opens.
Report your answer in 3-decimal precision.
Ex: If your answer is 666.54634654674, then 666.546.
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