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I'm stuck on question 3. I'm pretty sure I've got parts a-c. But after that I can't figure it out. 3. The following describes relative

I'm stuck on question 3. I'm pretty sure I've got parts a-c. But after that I can't figure it out.

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3. The following describes relative production costs in Russia and the US: per pound of titanium per bushel of wheat US $10 Russia 5,000 rubles 2,500 rubles a. The opportunity cost of an additional pound of titanium is in the US and 2500 rubles in Russia b. The opportunity cost of an additional bushel of wheat is $10 in the US and 5000 rubles in Russia574 Economics and Public Policy: An Analytical Approach c. The United States has a comparative advantage in wheat; Russia has a comparative advan- tage in titanium. d. Determine the production of wheat and titanium in both countries and the gains from trade if there is free trade between the two: production of wheat US titanium Russia gains from trade e. If the exchange rate were 1,000 rubles per dollar, would trade occur? If yes, explain the mechanism that would induce producers to export consistent with comparative advantage. If no, explain what would happen to the exchange rate (assume that exchange rates adjust to accommodate special- ization and trade). f. Suppose that the exchange rate were 100 rubles per dollar. Work through question e again

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