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Unformatted text preview: Explain briefly. f. Which country has a comparative advantage in stretchy pants production? Explain briefly. g. Assume that each country has 100 hours of labor available for production. Depict the production possibilities frontier between Ugg boots and stretchy pants for each country in the graphs below: h. Suppose that under autarky, Australia decides to produce 400 pairs of stretchy pants and 1200 pairs of Ugg boots. Likewise, suppose, again under autarky, that Pakistan decides to produce 600 pairs of stretchy pants and 300 pairs of Ugg boots. Given what we know about which country specializes in which product, state the change in production from the initial levels for each country, that is, calculate who wins and who loses in each country due to free trade relative to the autarky case. Stretchy pants (pairs) Ugg boots (pairs) Stretchy pants (pairs) Ugg boots (pairs) Australia Pakistan...
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This note was uploaded on 03/27/2011 for the course AEM 2300 taught by Professor Lee,d.r. during the Spring '06 term at Cornell.
- Spring '06