Question
Production and Consumption. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units.
Production and Consumption. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1,000 production units. With one unit of production(a mix ofland, labor,capital, andtechnology), China can produce either 8 containers of toys or 7 cases of wine. France can produce either 2 containers of toys or 7 cases of wine.Thus, a production unit in China is four times as efficient compared to France when producingtoys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 800 production units to building toys and 200 production units to producing wine. France allocates 200 production units to building toys and 800 production units to producing wine.
What is the production and consumption of China and France withouttrade?
a. What is the production and consumption of China and France withouttrade?
Calculate the production and consumption of China and France without tradebelow:(Round to the nearestinteger.)
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