Question 1 Consider the PPF for US and China as shown below in the diagram. Quantity of Computers 20 10 5 U.S. I 50 China 100 Quantity of Shirts What is the opportunity cost for producing each of these goods in each country? (Make a table Which country has a comparative advantage in the production of shirts? Why? b) d) c) Which country has a comparative advantage in the production of computers? Why? What should be the pattern of specialization and trade for these countries? Indicate the Specialization points for each country, and draw the TOT line on their respective PPFs. Has Trade made each country better off? Explain. e)

Question 1 Consider the PPF for US and China as shown below in the diagram. Quantity of Computers 20 10 5 U.S. I 50 China 100 Quantity of Shirts What is the opportunity cost for producing each of these goods in each country? (Make a table Which country has a comparative advantage in the production of shirts? Why? b) d) c) Which country has a comparative advantage in the production of computers? Why? What should be the pattern of specialization and trade for these countries? Indicate the Specialization points for each country, and draw the TOT line on their respective PPFs. Has Trade made each country better off? Explain. e)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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