In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces pistachios trades 18 million pounds of pistachios to the other country in exchange for 54 million pairs of chinos. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." When the two countries did not specialize, the total production of pistachios was 23 million pounds per day, and the total production of chinos was 68 million pairs per day. Because of specialization, the total production of pistachios has increased by million pounds per day, and the total production of chinos has increased by million pairs per day. Because the two countries produce more pistachios and more chinos under specialization, each country is able to gain from trade. Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Without Trade Production Consumption With Trade Production Trade action Consumption Gains from Trade Increase in Consumption Yosemite Pistachios (Millions of pounds) 8 8 Chinos (Millions of pairs) 48 48 Sequoia Pistachios (Millions of pounds) 15 15 Chinos (Millions of pairs) 20 20
In the following table, enter each country's production decision on the third row of the table (marked "Production"). Suppose the country that produces pistachios trades 18 million pounds of pistachios to the other country in exchange for 54 million pairs of chinos. In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption." When the two countries did not specialize, the total production of pistachios was 23 million pounds per day, and the total production of chinos was 68 million pairs per day. Because of specialization, the total production of pistachios has increased by million pounds per day, and the total production of chinos has increased by million pairs per day. Because the two countries produce more pistachios and more chinos under specialization, each country is able to gain from trade. Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption"). Without Trade Production Consumption With Trade Production Trade action Consumption Gains from Trade Increase in Consumption Yosemite Pistachios (Millions of pounds) 8 8 Chinos (Millions of pairs) 48 48 Sequoia Pistachios (Millions of pounds) 15 15 Chinos (Millions of pairs) 20 20
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces pistachios trades 18 million pounds of pistachios to the other country in exchange for 54 million pairs of chinos.
In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and
enter each country's final consumption of each good on the line marked "Consumption."
When the two countries did not specialize, the total production of pistachios was 23 million pounds per day, and the total production of chinos was 68
million pairs per day. Because of specialization, the total production of pistachios has increased by
million pounds per day, and the total
production of chinos has increased by
million pairs per day.
Because the two countries produce more pistachios and more chinos under specialization, each country is able to gain from trade.
Calculate the gains from trade-that is, the amount by which each country has increased its consumption of each good relative to the first row of the
table. In the following table, enter this difference in the boxes across the last row (marked "Increase in Consumption").
Without Trade
Produ tion
Consumption
With Trade
Production
Trade action
Consumption
Gains from Trade
Increase in Consumption
Yosemite
Pistachios
(Millions of pounds)
8
Chinos
(Millions of pairs)
48
48
Sequoia
Pistachios
(Millions of pounds)
15
15
Chinos
(Millions of pairs)
20
20
Transcribed Image Text:Suppose there exist two imaginary countries, Yosemite and Sequoia. Their labor forces are each capable of supplying four million hours per day that
can be used to produce pistachios, chinos, or some combination of the two. The following table shows the amount of pistachios or chinos that can be
produced by one hour of labor.
Country
Yosemite
Sequoia
Pistachios
(Pounds per hour of labor)
8
LO
5
Chinos
(Pairs per hour of labor)
16
20
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