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23 Let two countries Venusland and Marsland. Both countries produce cars and airplanes. The production functions are the following Venusland Marsland Cars Y = 0
23 Let two countries Venusland and Marsland. Both countries produce cars and airplanes. The production functions are the following Venusland Marsland Cars Y = 0 + 1.2 X Y = 0 + 0.9 X Airplanes Y = 0 + 0.95 X Y = 0 + 0.4 X After trade between the two countries has been established, the international terms of trade settle at 1.5 cars per 1 airplane Under that scenario, the airplane producers of Venusland will a. increase their purchasing power by between 10% and 17% b. increase their purchasing power by more than 17% c. decrease their purchasing power by more than 17% d. their purchasing power will not be affected e. increase their purchasing power by between 10% and 17%
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