5 Suppose that in Australia, producing a tonne of beef takes 10 hours of labour, while producing...

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5 Suppose that in Australia, producing a tonne of beef takes 10 hours of labour, while producing a shirt takes two hours of labour. In China, producing 1 tonne of beef takes 40 hours of labour, while producing a shirt takes four hours of labour. What will these nations trade?

a China will export beef, while Australia will export shirts.

b China will export shirts, while Australia will export beef.

c Both nations will export shirts.

d There are no gains from trade in this situation.

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Principles Of Microeconomics

ISBN: 125206

8th Edition

Authors: Joshua Gans, Stephen King, Martin Byford, N Gregory Mankiw

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