The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization rade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product A B D E F 120,000 96,000 72,000 48,000 24,000 Apparel Chemicals(tons) 24 48 72 96 120 Customize and control Google Chrome U.S. Production Possibilities Product R S T V W 24,000 8,000 Apparel Chemicals(tons) 40,000 32,000 16,0000 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? (Click to select) ♥ If so, what product should each produce? China should produce (Click to select) ♥ The United States should produce [(Click to select) ♥ p. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: units Chemicals: ton(s) c. What are the limits of the terms of trade? units of apparel for 1 ton of chemicals and units of apparel for 2 tons of chemicals. Suppose that the actual terms of trade are 1,000 units of apparel for 1½ 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? |(Click to select) has a gain of units of apparel. (Click to select) v has a gain of ton(s) of chemicals.
The following hypothetical production possibilities tables are for China and the United States. Assume that before specialization rade the optimal product mix for China is alternative B and for the United States is alternative U. China Production Possibilities Product A B D E F 120,000 96,000 72,000 48,000 24,000 Apparel Chemicals(tons) 24 48 72 96 120 Customize and control Google Chrome U.S. Production Possibilities Product R S T V W 24,000 8,000 Apparel Chemicals(tons) 40,000 32,000 16,0000 16 32 48 64 80 Instructions: Enter your answers as whole numbers. a. Are comparative-cost conditions such that the two countries should specialize? (Click to select) ♥ If so, what product should each produce? China should produce (Click to select) ♥ The United States should produce [(Click to select) ♥ p. What is the total gain in apparel and chemical output that would result from such specialization? Apparel: units Chemicals: ton(s) c. What are the limits of the terms of trade? units of apparel for 1 ton of chemicals and units of apparel for 2 tons of chemicals. Suppose that the actual terms of trade are 1,000 units of apparel for 1½ 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? |(Click to select) has a gain of units of apparel. (Click to select) v has a gain of ton(s) of chemicals.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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
D
E
F
120,000
48,000
Apparel
Chemicals(tons)
96,000
72,000
24,000
24
48
72
96
120
Customize and control Google Chrome
U.S. Production Possibilities
Product
R
S
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?
(Click to select) ♥
If so, what product should each produce?
China should produce (Click to select) V
The United States should produce (Click to select) V
b. What is the total gain in apparel and chemical output that would result from such specialization?
Apparel:
units
Chemicals:
ton(s)
c. What are the limits of the terms of trade?
units of apparel for 1 ton of chemicals and
units of apparel for 2 tons of chemicals.
Suppose that the actual terms of trade are 1,000 units of apparel for 1½ 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?
(Click to select)
v has a gain of
units of apparel.
(Click to select)
v has a gain of
ton(s) 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