Lilac Poland and Wales both produce boots and wheat. Poland's opportunity cost of producing a bushel of wheat is 6 pairs of boots whi Waless opportunity cost of producing a bushel of wheat is 11 pairs of boots. Bag S DAN By comparing the opportunity cost of producing wheat in the two countries, you can tell that Poland has a comparative advantage in the production of wheat and Wales has a comparative advantage in the production of boots. Suppose that Poland and Wales consider trading wheat and boots with each other. Poland can gain from specialization and trade as long as it rece more than 6 pairs of boots for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives more Da + MOD 1 bushel of wheat for each pair of boots it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of boots) would allow both Wales Poland to gain from trade? Check all that apply. 1 pair of boots per bushel of wheat

Lilac Poland and Wales both produce boots and wheat. Poland's opportunity cost of producing a bushel of wheat is 6 pairs of boots whi Waless opportunity cost of producing a bushel of wheat is 11 pairs of boots. Bag S DAN By comparing the opportunity cost of producing wheat in the two countries, you can tell that Poland has a comparative advantage in the production of wheat and Wales has a comparative advantage in the production of boots. Suppose that Poland and Wales consider trading wheat and boots with each other. Poland can gain from specialization and trade as long as it rece more than 6 pairs of boots for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives more Da + MOD 1 bushel of wheat for each pair of boots it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of boots) would allow both Wales Poland to gain from trade? Check all that apply. 1 pair of boots per bushel of wheat

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Ff.7.

Suppose that Poland and Wales both produce boots and wheat. Poland's opportunity cost of producing a bushel of wheat is 6 pairs of boots while
Wales's opportunity cost of producing a bushel of wheat is 11 pairs of boots.
Selangor and
By comparing the opportunity cost of producing wheat in the two countries, you can tell that Poland has a comparative advantage in the
production of wheat and Wales has a comparative advantage in the production of boots.
Suppose that Poland and Wales consider trading wheat and boots with each other. Poland can gain from specialization and trade as long as it receives
more than 6 pairs of boots for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives more than
of wheat for each pair of boots it exports to Poland.
1 bushel
Based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of boots) would allow both Wales and
Poland to gain from trade? Check all that apply.
1 pair of boots per bushel of wheat
✔8 pairs of boots per bushel of wheat
14 pairs of boots per bushel of wheat
7 pairs of boots per bushel of wheat

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