Suppose that Hungary and Wales both produce boots and wheat. Hungary's opportunity cost of producing a bushel of wheat is 4 pairs of boots while Wales's opportunity cost of producing a bushel of wheat is 12 pairs of boots. 5. The price of tradeSuppose that Hungary and Wales both produce boots and wheat. Hungary's opportunity cost of producing a bushel of wheat is 4 pairs of boots whileWales's opportunity cost of producing a bushel of wheat is 12 pairs of boots.By comparing the opportunity cost of producing wheat in the two countries, you can tell that Hungaryproduction of wheat and Wales has a comparative advantage in the production of boots.Suppose that Hungary and Wales consider trading wheat and boots with each other. Hungary can gain from specialization and trade as long as itreceives more thanof boots for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receivesmore thanof wheat for each pair of boots it exports to Hungary.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 andHungary to gain from trade? Check all that apply.7 pairs of boots per bushel of wheat2 pairs of boots per bushel of wheatboots per bushel whehas a comparative advantage in the1 pair16 pairs of boots per bushel of wheat

The worth of what you forgo while deciding between two or more possibilities is known as opportunity…

Answered: Suppose that Hungary and Wales both…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that Hungary and Wales both produce boots and wheat. Hungary's opportunity cost of producing a bushel of wheat is 4 pairs of boots while Wales's opportunity cost of producing a bushel of wheat is 12 pairs of boots.

5. The price of trade
Suppose that Hungary and Wales both produce boots and wheat. Hungary's opportunity cost of producing a bushel of wheat is 4 pairs of boots while
Wales's opportunity cost of producing a bushel of wheat is 12 pairs of boots.
By comparing the opportunity cost of producing wheat in the two countries, you can tell that Hungary
production of wheat and Wales has a comparative advantage in the production of boots.
Suppose that Hungary and Wales consider trading wheat and boots with each other. Hungary can gain from specialization and trade as long as it
receives more than
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 Hungary.
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
Hungary to gain from trade? Check all that apply.
7 pairs of boots per bushel of wheat
2 pairs of boots per bushel of wheat
boots per bushel whe
has a comparative advantage in the
1 pair
16 pairs of boots per bushel of wheat

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For your option under step 2; 4/12 and 12/4 isnt an option

Suppose that Hungary and Wales consider trading wheat and boots with each other. Hungary can gain from specialization and trade as long as it
receives more than 4 pairs of boots for each bushel of wheat it exports to Wales. Similarly, Wales can gain from trade as long as it receives
wheat for each pair of boots it exports to Hungary.
more than 1 bus
1 pair
Based on your answ 1/12 pairst question, which of the following prices of trade (that is, price of wheat in terms of boots) would allow both Wales and
Hungary to gain fro
eck all that apply.
✔ 7 pairs of
2 pairs of
1/4 pair
4 pairs
ushel of wheat
ushel of wheat
12 pairs
1 pair of boots per bushel of wheat

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