5. The price of trade

Suppose that Greece and Austria both produce fish and stained glass. Greece's opportunity cost of producing a pane of stained glass is 4 pounds of fish while Austria's opportunity cost of producing a pane of stained glass is 9 pounds of fish.

By comparing the opportunity cost of producing stained glass in the two countries, you can tell thatGreece has a comparative advantage in the production of stained glass andAustria has a comparative advantage in the production of fish.

Suppose that Greece and Austria consider trading stained glass and fish with each other. Greece can gain from specialization and trade as long as it receives more than of fish for each pane of stained glass it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than of stained glass for each pound of fish it exports to Greece.

Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of fish) would allow both Austria and Greece to gain from trade?Check all that apply.

6 pounds of fish per pane of stained glass

7 pounds of fish per pane of stained glass

1 pound of fish per pane of stained glass

13 pounds of fish per pane of stained glass

Attempts 1.8 Keep the Highest 1.8 / 3 5. The price of trade Suppose that Greece and Austria both produce fish and stained glass. Greece's opportunity cost of producing a pane of stained glass is 4 pounds of fish while Austria's opportunity cost of producing a pane of stained glass is 9 pounds of fish. By comparing the opportunity cost of producing stained glass in the two countries, you can tell that Greece * has a comparative advantage in the production of stained glass and Austria * has a comparative advantage in the production of fish. Suppose that Greece and Austria consider trading stained glass and fish with each other. Greece can gain from specialization and trade as long as it receives more than of fish for each pane of stained glass it exports to Austria. Similarly, Austria can gain from trade as long as it receives more than of stained glass for each pound of fish it exports to Greece. Based on your answer to the last question, which of the following prices of trade (that is, price of stained glass in terms of fish) would allow both Austria and Greece to gain from trade? Check all that apply. O 6 pounds of fish per pane of stained glass 0 7 pounds of fish per pane of stained glass 1 pound of fish per pane of stained glass O 13 pounds of fish per pane of stained glass