Chap003EndofChapterproblems

# Chap003EndofChapterproblems - Chapter 03 The Classical...

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Chapter 03 - The Classical World of David Ricardo and Comparative Advantage 3. In autarky, the production (and consumption) of textiles and autos will utilize all the available 1,000 days of labor. Thus, with T = number of units of textiles produced and A = number of autos produced, 1,000 = (2 days/unit)T + (5 days/unit)A. The consumption requirement is that 10 units of textiles be consumed for every unit of automobiles. Hence, total textile production is equal to (10) (total auto production), i.e., 10A. Thus, given the available
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## This note was uploaded on 10/24/2010 for the course ECON 460 taught by Professor Staff during the Fall '08 term at UNC.

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Chap003EndofChapterproblems - Chapter 03 The Classical...

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