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NATIONAL TRADE 03.ppt a Ls Exercise -1. the following table shows the number of days of labor required to produce 1 unit of output of
NATIONAL TRADE 03.ppt a Ls Exercise -1. the following table shows the number of days of labor required to produce 1 unit of output of computers and wheat in France and Germany: (a) calculate the autarky price ratios (b) which country has a comparative advantage in computers? Why? (c) if the terms of trade are 1C:22W, how many days of labor does France save per unit of its import good by engaging in trade? How many days does Germany save per unit of its import good? (d) if the terms of trade are 1C:24W, what is the result? (e) what can be said about the comparative distribution of the gains from trade between France and Germany in (d) and (c), why? D Computers Wheat 4 days 3 days France 100 days 60 days Germany
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