Suppose that Poland and Luxembourg both produce olive oil and glass. Poland's opportunity cost of producing a pane of glass is 6 crates of olive oil while Luxembourg's opportunity cost of producing a pane of glass is 11 crates of olive oil. 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 olive oil. has a comparative advantage in the Suppose that Poland and Luxembourg consider trading glass and olive oil with each other. Poland can gain from specialization and trade as long as it receives more than of olive oil for each pane of glass it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as of glass for each crate of olive oil it exports to Poland. it receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of olive oil) would allow both Luxembourg and Poland to gain from trade? Check all that apply. 3 crates of olive oil per pane of glass 14 crates of olive oil per pane of glass 1 crate of olive oil per pane of glass

Suppose that Poland and Luxembourg both produce olive oil and glass. Poland's opportunity cost of producing a pane of glass is 6 crates of olive oil while Luxembourg's opportunity cost of producing a pane of glass is 11 crates of olive oil. 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 olive oil. has a comparative advantage in the Suppose that Poland and Luxembourg consider trading glass and olive oil with each other. Poland can gain from specialization and trade as long as it receives more than of olive oil for each pane of glass it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as of glass for each crate of olive oil it exports to Poland. it receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of glass in terms of olive oil) would allow both Luxembourg and Poland to gain from trade? Check all that apply. 3 crates of olive oil per pane of glass 14 crates of olive oil per pane of glass 1 crate of olive oil 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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Suppose that Slovenia and Wales both produce olive oil and broccoli. Slovenia's opportunity cost of producing a bushel of broccoli is 4 crates of olive oil while Wales's opportunity cost of producing a bushel of broccoli is 12 crates of olive oil. By comparing the opportunity cost of producing broccoli in the two countries, you can tell that production of broccoli and has a comparative advantage in the production of olive oil. has a comparative advantage in the Suppose that Slovenia and Wales consider trading broccoli and olive oil with each other. Slovenia can gain from specialization and trade as long as it receives more than of olive oil for each bushel of broccoli it exports to Wales. Similarly, Wales can gain from trade as long as it of broccoli for each crate of olive oil it exports to Slovenia. receives more than Based on your answer to the last question, which of the following prices of trade (that is, price of broccoli in terms of olive oil) would allow both Wales and Slovenia…
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? Q 5. The price of trade Suppose that Hungary and Luxembourg both produce boo and shoes. Hungary's opportunity cost of producing a pair shoes is 4 pairs of boots while Luxembourg's opportunity cost of producing a pair of shoes is 12 pairs of boots. By comparing the opportunity cost of producing shoes in t two countries, you can tell that has a comparative has a A+ advantage in the production of shoes and comparative advantage in the production of boots. Suppose that Hungary and Luxembourg consider trading shoes and boots with each other. Hungary can gain from specialization and trade as long as it receives more than of boots for each pair of shoes it exports to Luxembourg. Similarly, Luxembourg can gain from trade as long as it receives more than of shoes 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 shoes in terms of boots) would allow both Luxembourg and Hungary to gain from trade?…
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