Question
A. Use data in the production possibilities table below to answer the following questions: Country/Good Beans Typewriters Nicaragua 10 20 Costa Rica 20 10 Assume
A. Use data in the "production possibilities" table below to answer the following questions:
Country/Good | Beans | Typewriters |
Nicaragua | 10 | 20 |
Costa Rica | 20 | 10 |
Assume that each country has the same labor endowment, so the numbers in the table above represent the amount that can be produced of a single good if all labor is devoted to producing that good (full specialization). A country can produce a mix of the two goods if it uses its opportunity cost number to reduce 1 good and increase the other. Based on this, choose a production pattern for each country and specify how much of a good it will export in exchange for a certain number of the imported goods. What is the country's total consumption of both goods after trade?
1990 | Beans | Typewriter |
Planning for trade | ||
Nicaragua produces: | ||
Costa Rica produces: | ||
Actual trade | ||
Nicaragua's imports & exports (specify which way and number) | ||
Costa Rica's imports & exports (specify which way and number) | ||
Post trade | ||
Nicaragua's consumption: | ||
Costa Rica's consumption: |
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