Assign2 - James E Pesando Economics 100 Assignment#2 The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
James E. Pesando Economics 100 Assignment #2 The Gains from Trade 1. Canada and Russia both produce wheat and meat. One Canadian worker can produce 20 bushels of wheat per hour or 5 pounds of meat per hour. A Russian worker can produce 16 bushels of wheat per hour or 8 pounds of meat per hour. a) Draw the production possibilities frontiers for Canada and Russia. b) What is the opportunity cost of producing wheat and meat in each of these two countries? c) If Canada and Russia decide to trade, which commodity will Russia trade to Canada? Explain. d) There are 1000 workers in Canada and in Russia. Before trade, workers devote one half of their time to the production of wheat and meat. After trade, workers specialize in the production of the good in which their country has a comparative advantage. What will happen to the total output of wheat and meat after trade occurs? e) If the “trade ratio” were 4 bushels of wheat for 1 pound of meat, would Canada benefit from trade? What about Russia? In what range must
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/02/2010 for the course ECO ECO100 taught by Professor Inheart during the Spring '09 term at University of Toronto.

Page1 / 2

Assign2 - James E Pesando Economics 100 Assignment#2 The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online