Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. Quantity of Computers (Millions) 8 27 21 18 15 + 12 6 3 0 0 10 20 30 40 50 60 70 Quantity of Shirts (Millions) True 80 90 100 O False U.S. PPF China PPF U.S. without Trade Suppose that without trade the workers in each country spend half their time producing each good. China without Trade Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) to indicate this production and consumption point for China. If these countries were open to trade, The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countries better off is shirts per computer, and the lowest price that makes both countries better off is shirts per computer. would export shirts and Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers. True or False: There are no longer gains from trade. would benefit from trade.
Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to graph the production possibilities frontier for China. Quantity of Computers (Millions) 8 27 21 18 15 + 12 6 3 0 0 10 20 30 40 50 60 70 Quantity of Shirts (Millions) True 80 90 100 O False U.S. PPF China PPF U.S. without Trade Suppose that without trade the workers in each country spend half their time producing each good. China without Trade Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) to indicate this production and consumption point for China. If these countries were open to trade, The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countries better off is shirts per computer, and the lowest price that makes both countries better off is shirts per computer. would export shirts and Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers. True or False: There are no longer gains from trade. would benefit from trade.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers.
There are 1 million workers in each country.
Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) to
graph the production possibilities frontier for China.
Quantity of Computers (Millions)
30
27
24
21
18
15
12
9
6
3
0
0
10
20
30 40 50 60 70
Quantity of Shirts (Millions)
80 90 100
If these countries were open to trade,
U.S. PPF
O True
O False
China PPF
U.S. without Trade
Suppose that without trade the workers in each country spend half their time producing each good.
True or False: There are no longer gains from trade.
*
Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) to
indicate this production and consumption point for China.
China without Trade
would export shirts and
The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countries
better off is
shirts per computer, and the lowest price that makes both countries better off is
shirts per computer.
would benefit from trade.
Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers.
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