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 E Apparel Chemicals (tons) 120,000 96,000 72,000 48,000 24,000 24 48 72 96 120 U.S. Production Possibilities Product R V W
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 E Apparel Chemicals (tons) 120,000 96,000 72,000 48,000 24,000 24 48 72 96 120 U.S. Production Possibilities Product R V W
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Just need B

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
Apparel
Chemicals (tons)
120,000
96,000
72,000
48,000
24,000
24
48
72
96
120
U.S. Production Possibilities
Product
R.
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 apparel O
The United States should produce chemicals
b. What is the total gain in apparel and chemical output that would result from such specialization?
Apparel: 224000 8 units
Chemicals:
144 8 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.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education