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Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 16,000 units of apparel are exchanged for 24 tons of chemicals. What are the gains from specialization and trade for each nation? China O has a gain of 2 8 units of apparel. The United States has a gain of 1 ton(s) of chemicals.

Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 16,000 units of apparel are exchanged for 24 tons of chemicals. What are the gains from specialization and trade for each nation? China O has a gain of 2 8 units of apparel. The United States has a gain of 1 ton(s) of chemicals.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Apparel Chemicals(tons) 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce apparel The United States should produce chemicals O b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 8000 units Chemicals: 8. ton(s) c. What are the limits of the terms of trade? 1000 units of apparel for 1 ton of chemicals and 1000 O units of apparel for 2 tons of chemicals. Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 16,000 units of apparel are exchanged for 24 tons of chemicals. What are the gains from specialization and trade for each nation? China O has a gain of 2 units of apparel. The United States O has a gain of 1 8 ton(s) of chemicals.
Transcribed Image Text:Apparel Chemicals(tons) 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce apparel The United States should produce chemicals O b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 8000 units Chemicals: 8. ton(s) c. What are the limits of the terms of trade? 1000 units of apparel for 1 ton of chemicals and 1000 O units of apparel for 2 tons of chemicals. Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 16,000 units of apparel are exchanged for 24 tons of chemicals. What are the gains from specialization and trade for each nation? China O has a gain of 2 units of apparel. The United States O has a gain of 1 8 ton(s) of chemicals.
The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product A B Apparel Chemicals (tons) 120,000 96,000 72,000 48,000 24,000 24 48 72 96 120 U.S. Production Possibilities Product R T. U V W Apparel Chemicals (tons) 40,000 32,000 24,000 16,0000 8,000 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce apparelO The United States should produce chemicals O b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 8000 units Chemicals: 8 O ton(s) c. What are the limits of the terms of trade? 1000 O units of apparel for 1 ton of chemicals and 1000 O units of apparel for 2 tons of chemicals.
Transcribed Image Text:The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization and trade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product A B Apparel Chemicals (tons) 120,000 96,000 72,000 48,000 24,000 24 48 72 96 120 U.S. Production Possibilities Product R T. U V W Apparel Chemicals (tons) 40,000 32,000 24,000 16,0000 8,000 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? Yes If so, what product should each produce? China should produce apparelO The United States should produce chemicals O b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: 8000 units Chemicals: 8 O ton(s) c. What are the limits of the terms of trade? 1000 O units of apparel for 1 ton of chemicals and 1000 O units of apparel for 2 tons of chemicals.
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