Ch 5 Global Trade [AP & Reg]

Forwiggytheopportunitycostofproducing1tonofchips

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Unformatted text preview: 12 18 24 __ P = 1B 1/5 1/3 8 beans [2x4] beans Before: Before: 2 porks porks 6 porks porks 8 porks porks After: 8 porks porks 8 – 8 = 0 porks porks Terms of Trade 4 1 Pork = __ Beans Pork Before: Before: 3 10 beans 10 6 beans beans 16 beans 16 After: 20 beans 20 20 – 16 = 4 beans 20 beans 15. Production in both countries is subject to (increasing/constant) opportunity cost. 16. If these 2 nations specialize in accordance with comparative advantage, Froggy will produce (pork/beans) & Woggy will produce (pork/beans). 17. In Froggy, the opportunity cost of 1 pork is (1/5 or 5 or 3) beans’ 18. Assume that prior to specialization & trade, Froggy produced combo “C” and Woggy produced “B”. If these 2 nations now specialize according to comparative advantage, the total gains will be (4/2/0) tons of beans & (4/2/0) ton(s) of pork. 19. Feasible terms of trade would be (1/6/4) ton of pork for (1/6/4) tons of beans. 50 Fish [10x5] Piggy A B C D E DCC: Piggy Wiggy A B C D E DCC: Wiggy Piggy 4 Fish...
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This note was uploaded on 07/20/2012 for the course ECON 2106 at GCSU.

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