solutions to PS2 comparative advantage

solutions to PS2 comparative advantage - : Brazil: I lb of...

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Comparative Advantage Problem Set #2: Solutions Please answer the four questions based on the data provided in the following table. Coffee Tea Output / worker in Brazil 9000 lbs 300 lbs Output / worker in China 5000 lbs 200 lbs 1. Estimate how many pounds of coffee it takes to produce one pound of TEA in Brazil : Brazil: 1 lb TEA = 9000/300 = 30 lbs of coffee : (importer / buyer) China: 1 lb TEA = 5000/200 = 25 lbs of coffee : (exporter / seller) 2. Estimate how many pounds of tea it takes to produce one pound of COFEE in China
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Unformatted text preview: : Brazil: I lb of COFFEE = 300/9000 = 0.033 lbs of tea : (exporter / seller) China: I lb of COFFEE = 200/5000 = 0.040 lbs of tea : (importer / buyer) 3. Which country (Brazil or China) should be a net exporter of Tea? CHINA 4. Indicate if the following terms of trade are acceptable (A) or unacceptable (U) to Brazil and China Brazil China 1 pound of Tea = 32 pounds of Coffee U A 1 pound of Coffee = 0.035 pounds of Tea A A 1 pound of Coffee = 0.065 pounds of Tea A U 1 pound of Tea = 20 pounds of Coffee A U...
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