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Unformatted text preview: If Uzbekistan and Azerbaijan each spends all its time producing the good in which it has a comparative advantage and trade takes place at a price of 12 bolts for 36 nails, then 5. Refer to Figure 3-9. Without trade, Uzbekistan produced and consumed 12 bolts and 36 nails and Azerbaijan pro-duced and consumed 14 bolts and 24 nails. Then, each country agreed to specialize in the production of the good in which it has a comparative advantage and trade 16 bolts for 38 nails. As a result, Uzbekistan gained A Q ch3 AP MacroEco Answer Section SHORT ANSWER 1. bolts and a comparative advantage in the production of bolts. 2. 46 bolts and 18 nails 3. 5 bolts and 10 nails. 4. both Uzbekistan and Azerbaijan will gain from this trade. 5. 2 bolts and 2 nails and Azerbaijan gained 2 bolts and 18 nails....
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This note was uploaded on 03/18/2012 for the course ITEC 3290 taught by Professor Dunn during the Spring '12 term at East Carolina University .
- Spring '12