Suppose that Ireland and Norway both produce ale and glass. Ireland's opportunity cost of producing a pane of glass is 6 kegs of ale while Norway's opportunity cost of producing a pane of glass is 11 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. Suppose that Ireland and Norway consider trading glass and ale with each other. Ireland can gain from specialization and trade as long as it receives of ale for each pane of glass it exports to Norway. Similarly, Norway can gain from trade as long as it receives more of glass for each keg of ale it exports to Ireland. more than than has a comparative advantage in the Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Norway and Ireland to gain from trade? Check all that apply. 14 kegs of ale per pane of glass 8 kegs of ale per pane of glass 7 kegs of ale per pane of glass 3 kegs of ale per pane of glass

Suppose that Ireland and Norway both produce ale and glass. Ireland's opportunity cost of producing a pane of glass is 6 kegs of ale while Norway's opportunity cost of producing a pane of glass is 11 kegs of ale. By comparing the opportunity cost of producing glass in the two countries, you can tell that production of glass and has a comparative advantage in the production of ale. Suppose that Ireland and Norway consider trading glass and ale with each other. Ireland can gain from specialization and trade as long as it receives of ale for each pane of glass it exports to Norway. Similarly, Norway can gain from trade as long as it receives more of glass for each keg of ale it exports to Ireland. more than than has a comparative advantage in the Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of ale) would allow both Norway and Ireland to gain from trade? Check all that apply. 14 kegs of ale per pane of glass 8 kegs of ale per pane of glass 7 kegs of ale per pane of glass 3 kegs of ale per pane of glass

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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