Question
RaleighandCaryhavethefollowinghourlyproductionofChickenWingsandFrenchFries.Wewantto find if there are gains from trade. Hint: thewayyouread the chart below is: Raleighcanproduce60chickenwings or 120frenchfries(orsomecombinationbetween;it is not 60 wings and 120 frenchfries). raleigh
RaleighandCaryhavethefollowinghourlyproductionofChickenWingsandFrenchFries.Wewantto find if there are gains from trade. Hint: thewayyouread the chart below is: Raleighcanproduce60chickenwingsor120frenchfries(orsomecombinationbetween;it is not 60 wingsand120 frenchfries).
raleigh has an hourly production of 60 chicken wings and 120 french fries
cary has an hourly production of 24 wings and 72 french fries
question 1: NowsupposeRaleighonlyproducesthegoodithasacomparativeadvantageinand Cary only produces thegoodit has a comparativeadvantagein.Howmuchofeachgooddoes each cityproduce?
question 2: Usingthenumbersfromquestion7,supposeRaleightrades19chickenwingsfor47 frieswithCary.Dobothcitiesgainfromtrade?Ifso,howmuchdoeseachcitygain?
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