5. Suppose that in Canada, producing an aircraft takes 10 000 hours of labour and producing a...
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5. Suppose that in Canada, producing an aircraft takes 10 000 hours of labour and producing a shirt takes 2 hours of labour. In China, producing an aircraft takes 40 000 hours of labour and producing a shirt takes 4 hours of labour. What will these nations trade?
a. China will export aircraft, and Canada will export shirts.
b. China will export shirts, and Canada will export aircraft.
c. Both nations will export shirts.
d. There are no gains from trade in this situation.
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Related Book For
Principles Of Macroeconomics
ISBN: 9780176591977
7th Canadian Edition
Authors: N. Mankiw, Ronald Kneebone, Kenneth McKenzie
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