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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 в Product Apparel (in thousands) Chemicals (in tons 30 24 18 12 12 18 24 30 U.S. Production Possibilities Product R T. Apparel (in thousands) Chemicals (in tona) 10 2. 16 4. 8. 12 20 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two areas should specialize? [(Click to select) If so, what product should each produce? China should produce [(Cick to select) The United States should produce (Cick to select) b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: Chemicals: tons c. What are the limits of the terms of trade? The most China will trade (give up) is unit(s) of apparel for 1 ton of chemicals. The most the United States will trade (give up) is ton(s) of chemicals for 1,000 units of apparel. This implies the following range, or limits, of the terms of trade: 1,000 units of apparel for ton(s) of chemicals (from China's position) ton(s) of chemicals (from the U.S. position) 1,000 units of apparel for Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 4,000 units of apparel are exchanged for 6 tons of chemicals. What are the gains from specialization and trade for each nation? (Cick to select) China has a gain of (Cick to select) v The United States has a gain of

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 в Product Apparel (in thousands) Chemicals (in tons 30 24 18 12 12 18 24 30 U.S. Production Possibilities Product R T. Apparel (in thousands) Chemicals (in tona) 10 2. 16 4. 8. 12 20 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two areas should specialize? [(Click to select) If so, what product should each produce? China should produce [(Cick to select) The United States should produce (Cick to select) b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: Chemicals: tons c. What are the limits of the terms of trade? The most China will trade (give up) is unit(s) of apparel for 1 ton of chemicals. The most the United States will trade (give up) is ton(s) of chemicals for 1,000 units of apparel. This implies the following range, or limits, of the terms of trade: 1,000 units of apparel for ton(s) of chemicals (from China's position) ton(s) of chemicals (from the U.S. position) 1,000 units of apparel for Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 4,000 units of apparel are exchanged for 6 tons of chemicals. What are the gains from specialization and trade for each nation? (Cick to select) China has a gain of (Cick to select) v The United States has a gain of

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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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 в Product Apparel (in thousands) Chemicals (in tons 30 24 18 12 12 18 24 30 U.S. Production Possibilities Product R T. Apparel (in thousands) Chemicals (in tona) 10 2. 16 4. 8. 12 20 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two areas should specialize? [(Click to select) If so, what product should each produce? China should produce [(Cick to select) The United States should produce (Cick to select) b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel:
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 в Product Apparel (in thousands) Chemicals (in tons 30 24 18 12 12 18 24 30 U.S. Production Possibilities Product R T. Apparel (in thousands) Chemicals (in tona) 10 2. 16 4. 8. 12 20 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two areas should specialize? [(Click to select) If so, what product should each produce? China should produce [(Cick to select) The United States should produce (Cick to select) b. What is the total gain in apparel and chemical output that would result from such specialization? Apparel:
Chemicals: tons c. What are the limits of the terms of trade? The most China will trade (give up) is unit(s) of apparel for 1 ton of chemicals. The most the United States will trade (give up) is ton(s) of chemicals for 1,000 units of apparel. This implies the following range, or limits, of the terms of trade: 1,000 units of apparel for ton(s) of chemicals (from China's position) ton(s) of chemicals (from the U.S. position) 1,000 units of apparel for Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 4,000 units of apparel are exchanged for 6 tons of chemicals. What are the gains from specialization and trade for each nation? (Cick to select) China has a gain of (Cick to select) v The United States has a gain of
Transcribed Image Text:Chemicals: tons c. What are the limits of the terms of trade? The most China will trade (give up) is unit(s) of apparel for 1 ton of chemicals. The most the United States will trade (give up) is ton(s) of chemicals for 1,000 units of apparel. This implies the following range, or limits, of the terms of trade: 1,000 units of apparel for ton(s) of chemicals (from China's position) ton(s) of chemicals (from the U.S. position) 1,000 units of apparel for Suppose that the actual terms of trade are 1,000 units of apparel for 12 tons of chemicals and that 4,000 units of apparel are exchanged for 6 tons of chemicals. What are the gains from specialization and trade for each nation? (Cick to select) China has a gain of (Cick to select) v The United States has a gain of
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