rade at France's Domestic Price. This problem illustrates an example of trade induced by comparative advantage. It assumes that China and France each have 1000 production units. With one unit of production (a mix of land, labor, capital, and technology), China can produce either 8 containers of toys or 8 cases of wine. France can produce either 22 cases of toys or 8 cases of wine. Thus, a production unit in China is sixsix times as efficient compared to France when producing toys, but equally efficient when producing wine. Assume at first that no trade takes place. China allocates 850 production units to building toys and 150 production units to producing wine. France allocates 150 production units to building toys and 850 production units to producing wine. a. What is the production and consumption of China and France without trade? b. Assume complete specialization, where China produces only toys and France produces only wine. What would be the effect on total production? c. France's domestic price is 22 containers of toys equals 88 cases of wine. Assume China produces 8 comma 8000 containers of toys and exports 300300 containers to France. Assume France in turn produces 8000 cases of wine and exports 1200 cases to China. What happens to total production and consumption?

a. What is the production and consumption of China and France without trade?

Calculate the production and consumption of China and France without trade below:(Round to the nearest integer.)

Production if there is no trade Toys

China

Allocated Production units to . ______

Produces and consumes (output per unit x units allocated) . ______

France

Allocated production units to ______

Produces and consumes (output per unit x units allocated). _______

Total production and consumption acros both countries . _______