The table below shows the production of beef (in pounds) and autos of ONE worker in Argentina and in Mexico: Beef (in pounds) Autos Argentina 100 10 Мexico 40 30 1. Suppose that BEFORE TRADE (or WITHOUT TRADE) each country has 50 workers and they each allocate 25 workers for the production of beef and 25 workers for the production of autos. Find the maximum production and consumption of both goods for each country. 2. If the countries decide to engage in trade (WITH TRADE), they will specialize in the production of the good in which they have comparative advantage. In which good should Argentina specialize? How about Mexico? JUSTIFY! (To answer this question you must calculate the opportunity cost of each good for both countries and then find the country's comparative advantage). What is the WITH TRADE production of the countries? 3. If the countries decide to engage in trade the TERMS-OF-TRADE will be set at 1,500 pounds of beef for 300 autos. With this information complete the tables below (show your work!): ARG Produce Consume Gains from Trade Вeef Autos МЕX Produce Consume Gains from Trade Вeef Autos

The table below shows the production of beef (in pounds) and autos of ONE worker in Argentina and in Mexico: Beef (in pounds) Autos Argentina 100 10 Мexico 40 30 1. Suppose that BEFORE TRADE (or WITHOUT TRADE) each country has 50 workers and they each allocate 25 workers for the production of beef and 25 workers for the production of autos. Find the maximum production and consumption of both goods for each country. 2. If the countries decide to engage in trade (WITH TRADE), they will specialize in the production of the good in which they have comparative advantage. In which good should Argentina specialize? How about Mexico? JUSTIFY! (To answer this question you must calculate the opportunity cost of each good for both countries and then find the country's comparative advantage). What is the WITH TRADE production of the countries? 3. If the countries decide to engage in trade the TERMS-OF-TRADE will be set at 1,500 pounds of beef for 300 autos. With this information complete the tables below (show your work!): ARG Produce Consume Gains from Trade Вeef Autos МЕX Produce Consume Gains from Trade Вeef Autos

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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