Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. The price of trade Suppose that Poland and Slovakia both produce olive oil and broccoli. Poland's opportunity cost of producing a bushel of broccoli

image text in transcribed
5. The price of trade Suppose that Poland and Slovakia both produce olive oil and broccoli. Poland's opportunity cost of producing a bushel of broccoli is 6 crates of olive oil while Slovakia's opportunity cost of producing a bushel of broccoli is 11 crates of olive oil. By comparing the opportunity cost of producing broccoll In the two countries, you can tell that has a comparative advantage In the production of broccoli and has a comparative advantage in the production of olive oil. Suppose that Poland and Slovakia consider trading broccoli and olive oil with each other. Poland can gain from specialization and trade as long as it receives more than of olive oil for each bushel of broccoll it exports to Slovakia. Similarly, Slovakla can gain from trade as long as it receives more than of broccoli for each crate of olive oil it exports to Poland. Based on your answer to the last question, which of the following prices of trade (that is, price of broccoli In terms of olive oil) would allow both Slovakia and Poland to gain from trade? Check all that apply. 5 crates of olive oil per bushel of broccoli 7 crates of olive oil per bushel of broccoli 17 crates of olive oil per bushel of broccoli 1 date of olive oil per bushel of broccoli

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics And The Environment A Materials Balance Approach

Authors: Allen V Kneese, Robert U Ayres, Ralph C D'Arge

1st Edition

1317402251, 9781317402251

More Books

Students also viewed these Economics questions

Question

How to find if any no. is divisble by 4 or not ?

Answered: 1 week ago

Question

Explain the Pascals Law ?

Answered: 1 week ago

Question

What are the objectives of performance appraisal ?

Answered: 1 week ago

Question

2. What do the others in the network want to achieve?

Answered: 1 week ago

Question

1. What do I want to achieve?

Answered: 1 week ago