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Assume that with one unit of production (a mixture of land, labor, capital, and technology) S. Korea can produce 10 TVs or 8 bales of
Assume that with one unit of production (a mixture of land, labor, capital, and technology) S. Korea can produce 10 TVs or 8 bales of wool. Australia can produce 2 TVs or 4 bales of wool with each unit of production. Each country dedicates a total of 100 unit of production for TVs and wool. At a trading ratio of 7/8 (TVs for bales of wool): a) Australia gains 100% of the benefits of trade. b) Australia and S. Korea equally share the advantage brought about by trade. c) Korea gains 100% of the benefits of trade. d) In this example, neither country benefits from international trade
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