Question
Assume Ghana is more efficient in the production of both cocoa and rice. In Ghana, it takes 10 resources to produce one tone of cocoa,and
Assume Ghana is more efficient in the production of both cocoa and rice. In Ghana, it takes 10 resources to produce one tone of cocoa,and 13 1/3 resources to produce one ton of rice. So, Ghana could produce 20 tons of cocoa and no rice, 15 tons of rice and no cocoa, or some combination of the two. In South Korea, it takes 40 resources to produce one ton of cocoa and 20 resources to produce one ton of rice. So, South Korea could produce 5 tons of cocoa and no rice, 10 tons of rice and no cocoa, or some combination of the two. Resources Required to Produce 1 Ton of Cocoa and Rice Cocoa Rice Ghana 10 13.33 South Korea 40 20 Production and Consumption without Trade Ghana 10 7.5 South Korea 2.5 5 Total Production 12.5 12.5 Production with Specialization Ghana 15 3.75 South Korea 0 10 Total Production 15 13.75 Consumption after Ghana Trades 4 Tons of Cocoa for 4 Tons of South Korean Rice Ghana 11 7.75 South Korea 4 6 Increase in Consumption as a Resultof Specialization and Trade Ghana A. B. South Korea C. D. How much both countries increase in Rice and Cocoa Consumption as a resultof Specialization and Trade? Answer blanks for A, B, C, and D. A. B. C. D.
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