Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Country A and B each have 1000 units of labour. In Country A, one unit of labour can produce 10 computers or 30 kilograms of

Country A and B each have 1000 units of labour. In Country A, one unit of labour can produce 10 computers or 30 kilograms of cheese. Country B can use one unit of labour to produce 14 kilograms of cheese or 16 computers. Suppose Country A follows its comparative advantage in deciding what to produce and trades with Country B at a trade price of 0.8 computer per kilogram of cheese, and Country A consumes 18000 kilograms of cheese at home, then Country A's gain from trade would be _____________computers.

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

Puzzle Of Latin American Economic Development

Authors: Patrice Franko

2nd Edition

0742524663, 9780742524668

More Books

Students also viewed these Economics questions

Question

analyze how research and writing unites with design.

Answered: 1 week ago