**Production Possibility Curves for the United States and Mexico****United States:**- Beef: 30, Vegetables: 0- Beef: 22, Vegetables: 8- Beef: 18, Vegetables: 12- Beef: 12, Vegetables: 21- Beef: 0, Vegetables: 24**Mexico:**- Beef: 14, Vegetables: 0- Beef: 11, Vegetables: 1- Beef: 8, Vegetables: 4- Beef: 3, Vegetables: 11- Beef: 0, Vegetables: 20**Scenario:**Suppose the United States produces 18 tons of beef and 12 tons of vegetables without trade. Mexico produces 8 tons of beef and 4 tons of vegetables without trade. After trade negotiations:- The United States will produce 30 tons of beef.- Mexico will produce 20 tons of vegetables.- The United States exports 10 tons of beef to Mexico.- Mexico exports 15 tons of vegetables to the United States.**Analysis:**Each country specializes in the production where they have a comparative advantage, trading to increase overall availability. The U.S. and Mexico both gain from trade as they have access to more products than if they did not trade.

Before specialization and trade the production and consumption of the US and Mexico are given in the…

Draw the following production possibility curves for the United States and Mexico when it comes to beef and vegetable outputs in tons. Beef 30 22 18 12 0 Beef 14 11 8 3 OW 0 United States Mexico Vegetables 0 8 12 21 24 Vegetables 0 1 4 11 20 Using the numbers from the tables above, suppose the United States settles on producing 18 tons of beef and 12 tons of vegetables before any kind of trade and specialization. Mexico settles on 8 tons of beef and 4 tons of vegetables before and kind of trade and specialization. However, after trade negotiations, the United States decides to only produce beef and Mexico decides to only produce vegetables, which means the United States will produce 30 tons of beef and Mexico will produce 20 tons of vegetables. What will the outputs available be after trade if the United States exports 10 of the 30 tons of beef to Mexico and Mexico exports 15 of the 20 tons of vegetables to the United States? Do both countries gain from specialization and trade?

Draw the following production possibility curves for the United States and Mexico when it comes to beef and vegetable outputs in tons. Beef 30 22 18 12 0 Beef 14 11 8 3 OW 0 United States Mexico Vegetables 0 8 12 21 24 Vegetables 0 1 4 11 20 Using the numbers from the tables above, suppose the United States settles on producing 18 tons of beef and 12 tons of vegetables before any kind of trade and specialization. Mexico settles on 8 tons of beef and 4 tons of vegetables before and kind of trade and specialization. However, after trade negotiations, the United States decides to only produce beef and Mexico decides to only produce vegetables, which means the United States will produce 30 tons of beef and Mexico will produce 20 tons of vegetables. What will the outputs available be after trade if the United States exports 10 of the 30 tons of beef to Mexico and Mexico exports 15 of the 20 tons of vegetables to the United States? Do both countries gain from specialization and trade?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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