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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.
 '08
 SCAFIDI
 Microeconomics

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