Example1 (1)

Example1 (1) - hours of labor available. Draw the PPF for...

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ECON 460: Example 1 1. Use the following information to answer the questions below: # of hours/PC # of hours/Shirt Bangladesh 100 2 USA   20 1 a. Which country has an absolute advantage in making PCs? Shirts? b. Which country has a comparative advantage in each of these goods? c. What is the autarky price of a PC in Bangladesh? USA? d. Let us say that the terms of trade is 1 PC = 40 shirts. What is the number of hours saved  by Bangladesh and USA per unit of their respective import good?
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e. Suppose that the US has 40,000 hours of labor available and Bangladesh has 20.000 
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Unformatted text preview: hours of labor available. Draw the PPF for each country. f. Let us say that the US exports 200 PCs at the above TOT. What is the consumption level of each of these two goods in the two countries? g. Draw the Production possibility frontier, the consumption possibility frontier and show the consumption after trade for each of the two countries. Also, show the trade triangle for each of the two countries....
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Example1 (1) - hours of labor available. Draw the PPF for...

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