Suppose that in a year an American worker can produce 60 shirts or 30 computers and a Chinese worker can produce 60 shirts or 12 computers. There are 1 million workers in each country. Suppose that without trade the workers in each country spend half their time producing each good.Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) toindicate this production and consumption point for China.If these countries were open to trade,would export shirts andwould benefit from trade.The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countriesbetter off is ▼ shirts per computer, and the lowest price that makes both countries better off is ▼ shirts per computer.Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers.True or False: There are no longer gains from trade.O TrueO False CENGAGE MINDTAPQ Search thisProblems & Applications (Ch 03)Use the blue line (circle symbol) to graph the production possibilities frontier (PPF) for the United States, and use the green line (triangle symbol) tograph the production possibilities frontier for China.Is30-O-27U.S. PPF24A2118China PPF1512U.S. without TradeChina without Trade3.508070809010010203040Quantity of Shirts (Millions)ENGaQuantity of Comput ers (Millions)

Production Possibility Curve is the locus (graphical representation) of different possible…

Suppose that without trade the workers in each country spend half their time producing each good. Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) indicate this production and consumption point for China. If these countries were open to trade, would export shirts and would benefit from trade. The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countri better off is v shirts per computer, and the lowest price that makes both countries better off is v shirts per computer. Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers. True or False: There are no longer gains from trade. O True O False

Suppose that without trade the workers in each country spend half their time producing each good. Use the black point (plus symbol) to indicate this production and consumption point for the United States, and use the grey point (star symbol) indicate this production and consumption point for China. If these countries were open to trade, would export shirts and would benefit from trade. The price of a computer can be expressed in terms of shirts. The highest price for which a computer can be traded that would make both countri better off is v shirts per computer, and the lowest price that makes both countries better off is v shirts per computer. Suppose that China catches up with American productivity so that a Chinese worker can produce 60 shirts or 30 computers. True or False: There are no longer gains from trade. O True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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