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Hi, I would like some help on the question below: [There are 100 workers in South Korea, and each worker can produce either 50 smartphones
Hi, I would like some help on the question below:
[There are 100 workers in South Korea, and each worker can produce either 50 smartphones or 10 laptops. There are 200 workers in India, and each can produce 15 smartphones or 15 laptops.] a. [Draw the Production Possibility Curves (PPC) for each country. What is the opportunity cost of smartphones in South Korea? What is the opportunity cost of smartphones in India? Which country has a comparative advantage in the production of smartphones? (5 marks)] b. [In the absence of trade, if South Korea consumes 3000 smartphones, how many laptops can it consume? In the absence of trade, if India consumes 1500 laptops, how many smartphones can it consume? (2 marks)] c. [Someone now proposes that South Korea and India enter into a trade agreement. Under this agreement, South Korea will give India 2000 smartphones and India will give South Korea 500 laptops. If now South Korea consumes 2500 smartphones, how many laptops will it be able to consume under this proposal? If India continues to consume 1500 laptops, how many smartphones will it be able to consume under this proposal? Should South Korea accept this proposal? Should India accept this proposal? (3 marks)]Step by Step Solution
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