Ch 5 Global Trade [AP & Reg]

Productioninbothcountriesissubjecttoincreasingconstant

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Unformatted text preview: rative advantage in (wheat/steel). 5. The opportunity cost of one unit of wheat for Chile is (2/4/6) units of steel. The opportunity cost of one unit of steel for Brazil is (1/2 or ¼ ) wheat. 6. If trade occurred, Chile would export (wheat/steel) & import (wheat/steel). Brazil would export (wheat/steel) & import (wheat/steel). 0 Brazil 40 Bread Bread DCC for U.S. DCC costs 14 1 1 H = __ B4 ___H = 1B 1/14 70 Ham 5 0 Ham 4 DCC for Brazil costs 10 1 H = __ B ___ H = 1B 1/10 Terms of Trade 12 1 Ham = __ Bread 8. Brazil has a comparative advantage in (bread/ham) and a Brazil comparative disadvantage in (bread/ham). comparative 9. The opportunity cost of producing 1 unit of ham for the U.S. for is (10/12/14) breads. 10. Acceptable terms of trade might be 1 ham for (8/12/16) breads. terms 2.5 pork [10x1/4] pork Froggy A B C D E DCC: Froggy Woggy A B C D E DCC: Woggy Froggy Pork(tons) 4 3 2 1 0 1P = __ B Pork(tons) 8 6 4 2 0 1P = __ B 5 Beans(tons) 0 5 10 15 20 __ P = 1B Beans(tons) 0 6...
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