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2. (Comparative Advantage) The following table shows production capabilities for China and France. Production units Containers of toys Cases of wine China (1,000 units) 10/unit
2. (Comparative Advantage) The following table shows production capabilities for China and France. Production units Containers of toys Cases of wine China (1,000 units) 10/unit 7/unit France (1,000 units) 2/unit 7/unit When no trade takes place, China allocates 800 production units to building toys and 200 production units to producing wine; France allocates 200 production units to building toys and 800 production units to producing wine. (a) Construct a table to show the production and consumption of China and France without trade. (b) With complete specialization and output maximization for each product, which country should produce toys only? (c) With complete specialization, output maximization for each product, and international trade being no worse than no trade, if France exports X cases of wine to China with the price of P toys/wine, find the range of X and P. (d) With complete specialization, output maximization for each product, and international trade being no worse than no trade, if France exports 1,400 cases of wine to China with the price of (6/7) toys/wine, how many containers of toys and cases of wine will be available for consumption in China
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