Suppose that Portugal and Austria both produce fish and wine. Portugal's opportunity cost of producing a bottle of wine is 3 pounds of fish while Austria's opportunity cost of producing a bottie of wine is 11 pounds of fish. By comparing the opportunity cost of producing wine in the two countries, you can tell that has a comparative advantage in the production of wine and has a comparative advantage in the production of fish. Suppose that Portugal and Austria consider trading wine and fish with each other. Portugal can gain from specialization and trade as long as it receives more than v of fish for each bottle of wine it exports to Austria. Similarty, Austria can gain from trade as lang as it receives more than of wine for each pound of fish it exports to Portugal. Besed on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of fish) would allow both Austria and Portugal to gain from trade? Check all that apply.

Suppose that Portugal and Austria both produce fish and wine. Portugal's opportunity cost of producing a bottle of wine is 3 pounds of fish while Austria's opportunity cost of producing a bottie of wine is 11 pounds of fish. By comparing the opportunity cost of producing wine in the two countries, you can tell that has a comparative advantage in the production of wine and has a comparative advantage in the production of fish. Suppose that Portugal and Austria consider trading wine and fish with each other. Portugal can gain from specialization and trade as long as it receives more than v of fish for each bottle of wine it exports to Austria. Similarty, Austria can gain from trade as lang as it receives more than of wine for each pound of fish it exports to Portugal. Besed on your answer to the last question, which of the following prices of trade (that is, price of wine in terms of fish) would allow both Austria and Portugal to gain from trade? Check all that apply.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter33: International Trade

Section: Chapter Questions

Problem 30P: In Japan, one worker can make 5 tons of rubber or 80 radios. In Malaysia, one worker can make 10...

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