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
Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter33: International Trade
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Problem 6SCQ: Table 33.15 shows how the average costs of production for semiconductors (the chips In computer...
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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42a126bb-9497-41f3-aba1-f417c4f85af2%2F122c0e95-b8d1-4b74-acb4-34df57886fac%2Fgg8oxc_processed.jpeg&w=3840&q=75)
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.
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