6. Suppose that the opportunity-cost ratio for watches and cheese is 1C 1W in Switzerland but...

Question:


6. Suppose that the opportunity-cost ratio for watches and cheese is 1C ≡ 1W in Switzerland but 1C ≡ 4W in Japan. At which of the following international exchange ratios (terms of trade) will Switzerland and Japan be willing to specialize and engage in trade with each other? LO20.2 Select one or more answers from the choices shown.

a. 1C ≡ 3W.

b. 1C ≡ 12 W.

c. 1C ≡ 5W.

d. 12 C ≡ 1W.

e. 2C ≡ 1W.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Macroeconomics

ISBN: 9781259915673

21st Edition

Authors: Campbell McConnell, Stanley Brue , Sean Flynn

Question Posted: