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Comparative advantage and trade: Suppose there are two goods in the world, heel; and chips. The world consists of three economies: m m and Sodor.
Comparative advantage and trade: Suppose there are two goods in the world, heel; and chips. The world consists of three economies: m m and Sodor. Labor is the only input into production, and one unit of labor can produce beer and chips in each of these economies according to the following table: Country Bottles of Beer Bags of Chips Elhi 5 5 gpngg 5 10 Sodor 10 15 *3 Prices are expressed in units of bags of chips, so the price of a bag of chips is 1. What is the price of a bottle of beer (in chips!) in each economy when there is no trade? *3 Now suppose we have trade. 33' When mnades with @3933, who should produce and export beer and who should produce and export chips? Show your calculations and explain why. 33' When mnades with Sodor, who should produce and export beer and who should produce and export chips? Show your calculations and explain why
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