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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.

ENGR.ECONOMIC ANALYSIS
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 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. Similarly, Austria can gain from trade as lang as it receives more than v of wine for each pound of rish it exports to Portugal. Based 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. O 2 pounds of fish per bottle of wine U 7 pounds of fish per bottie of wine Ui pound of fish per bottie of wine D 10 pounds of fish per bottie of wine
Transcribed Image Text: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. Similarly, Austria can gain from trade as lang as it receives more than v of wine for each pound of rish it exports to Portugal. Based 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. O 2 pounds of fish per bottle of wine U 7 pounds of fish per bottie of wine Ui pound of fish per bottie of wine D 10 pounds of fish per bottie of wine
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