QUESTION 1. Consider two countries: South Korea and New Zealand and two goods: Lamb and Air Pumps. South Korea imports $210 million worth of lamb from New Zealand and exports $10 million worth of lamb to New Zealand. On the other hand, New Zealand imports $60 million worth of air pumps from South Korea and exports $20 million worth of air pumps to South Korea. What is the inter-industry trade measure between these two countries? (a) 2/3. (b) 1/5. (c) 4/5. (d) 1/3. Explain why.
QUESTION 1. Consider two countries: South Korea and New Zealand and two goods: Lamb and Air Pumps. South Korea imports $210 million worth of lamb from New Zealand and exports $10 million worth of lamb to New Zealand. On the other hand, New Zealand imports $60 million worth of air pumps from South Korea and exports $20 million worth of air pumps to South Korea. What is the inter-industry trade measure between these two countries? (a) 2/3. (b) 1/5. (c) 4/5. (d) 1/3. Explain why.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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QUESTION 1.
Consider two countries: South Korea and New Zealand and two goods: Lamb and Air Pumps. South Korea
imports $210 million worth of lamb from New Zealand and exports $10 million worth of lamb to New Zealand.
On the other hand, New Zealand imports $60 million worth of air pumps from South Korea and exports $20
million worth of air pumps to South Korea. What is the inter-industry trade measure between these two countries?
(a) 2/3.
(b) 1/5.
(c) 4/5.
(d) 1/3.
Explain why.
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