Question
Please Help me solve question below. Thank you 1- Suppose two nations are considering specializing in either calculators or personal computers. If solely producing calculators,
Please Help me solve question below. Thank you
1- Suppose two nations are considering specializing in either calculators or personal computers. If solely producing calculators, country A can produce 300 and country B can produce 400. If solely producing personal computers, country A can produce 150 and country B can produce 100. Assume their labor forces are of equivalent size.
a) which country has the comparative advantage in calculators? In computer? ( show the work and explain )
b) It is predicted that current demand will yield an exchange of 3 calculators for every 1 computer. Will trade occur?? If not, how do you know and is it because both countries are against trade? If trade does occur, explain how you know.
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