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
icon
Related questions
Question

Choose one from the following:

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.

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
World Bank
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Macroeconomics
Macroeconomics
Economics
ISBN:
9781337617390
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics: Private and Public Choice (MindTa…
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Macroeconomics: Private and Public Choice (MindTa…
Macroeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506756
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning