Question
Maria and Shayla produce pickles and cheese. Maria's production function is Q P = 424 - 4Q C Shayla's production function is Q P =
Maria and Shayla produce pickles and cheese.
Maria's production function is QP = 424 - 4QC
Shayla's production function is QP = 390 - 6QC
These two people are currently not trading. Maria is currently producing and consuming 220 pickles and 51 cheeses. Shayla is currently producing and consuming 150 pickles and 40 cheeses. Then these two people specialize and trade based on comparative advantage. The terms of trade are 229 pickles for 49 cheeses. What are the gains from trade for Shayla in terms of PICKLES?
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Managing in a Global Economy Demystifying International Macroeconomics
Authors: John E. Marthinsen
2nd edition
128505542X, 978-1305176157, 1305176154, 978-1285055428
