Suppose the domestic autarky relative price M/S = 1 and autarky consumption takes place at (M,S) = (100,100). Production with free trade takes place at (M,S) = (50,160) with 50 units exported and 60 units imported. Find the consumption bundle (M,S). Sketch the trade triangle. What are the terms of trade?
Suppose the domestic autarky relative price M/S = 1 and autarky consumption takes place at (M,S) = (100,100). Production with free trade takes place at (M,S) = (50,160) with 50 units exported and 60 units imported. Find the consumption bundle (M,S). Sketch the trade triangle. What are the terms of trade?
Chapter1: Making Economics Decisions
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Suppose the domestic autarky relative price M/S = 1 and autarky consumption takes place at (M,S) = (100,100). Production with free trade takes place at (M,S) = (50,160) with 50 units exported and 60 units imported. Find the consumption bundle (M,S). Sketch the trade triangle. What are the terms of trade?
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