worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth. Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is: a. Pf/ Pc = 7 or 1F = 7C. b. Pf/ Pc = 6 or 1F = 6C c. Pf/ Pc = 2 or 1F = 2C. d. Pf/ Pc = 4 or 1F = 4C. e. None af the above.
worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth. Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is: a. Pf/ Pc = 7 or 1F = 7C. b. Pf/ Pc = 6 or 1F = 6C c. Pf/ Pc = 2 or 1F = 2C. d. Pf/ Pc = 4 or 1F = 4C. e. None af the above.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter33: International Trade
Section33.1: International Trade Theory
Problem 2ST
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A worker in Pakistan can produce either 5 units of food per day or 15 yards of cloth. A worker in India can produce either 1 food per day or 5 yards of cloth.
Trade between India and the Pakistan would definitely occur where the price of food in terms of cloth (terms of trade) is:
a. Pf/ Pc = 7 or 1F = 7C.
b. Pf/ Pc = 6 or 1F = 6C
c. Pf/ Pc = 2 or 1F = 2C.
d. Pf/ Pc = 4 or 1F = 4C.
e. None af the above.
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