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Country A is a small country that produces an agricultural good (maize) and a manufactured good [widgets]. It takes 5 hours to produce a bushel
Country A is a small country that produces an agricultural good (maize) and a manufactured good [widgets]. It takes 5 hours to produce a bushel of maize and 10 hours to produce a widget. Country A workers work 90 million (90M) hours per year. a. Draw Country A's yearly ppc. (Put maize on the horizontal axis.) b. In autarlty. Country A produces (and consumes) 5M widgets. How much labor is allocated to widget production and how much to maize production? Show your calculations. c. In autarky, what is the price of a bushel of maize (in terms of widgets)? Country A opens to trade with the ROW. The price of a bushel of maize in the ROW is 0.?5 widgets. d. Which good will Country A export? Briey explain. Add Country A's trade line to your graph in part [a]. f. If Country A now consumes 6M widgets, what are Country A's imports and exports? Give numerical 1values. F\" g. [3 points each.) Use the infonnation given above to add points to your graph in part [a] representing [i] Country A's production and consumption under autarlcy. (ii) Country A's production with free trade. (iii) Country A's consumption with free trade. h. Does Country A or the ROW gain more from trade? Briefly explain
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